October 12th is National Savings Day – Perspectives from a Young(er) Professional to Other Young(er) Professionals
Why am I writing this? We all see the various National *Insert The Topic-Du-Jour* Months or Days that fall throughout the year. But, when I saw that it was National Savings Day, I found it to be one that encompasses just about every young(er) professional, including myself both personally and professionally. As the Wealth Planning Director with Kindred Wealth Partners, I have the unique perspective of being a part of just about every client’s financial and personal journey – how they arrived at where they are, where they want to be, and how they can get there. The common denominator that drives all three of these positions (at least financially) is how they have saved and how they will save. I think many younger people, thanks to social media, believe that the “rich” simply just make more money than everyone else. However, I have found in my work with our clients it as simple as this in almost every case – Most have just saved more than others.
Why Saving Matters to Young Professionals
As a young professional myself, I understand the complexities of navigating the early stages of a career while trying to make smart financial decisions. We’re all balancing the immediate needs of today—rent/mortgage, student loans, and the costs of building our lives and families—with the pressure to save for a future that can feel both distant and uncertain. However, that’s exactly why National Savings Month is an important reminder for us: the choices we make today can have a significant impact on our financial well-being tomorrow.
Start Early or Start Small, But Start Consistently
One of the most powerful habits young professionals can adopt is consistent saving. Even if it’s a small percentage of your paycheck each month, those early contributions can grow exponentially over time due to the power of compound interest. The earlier we start, the less we need to set aside later. In my work with clients, I often emphasize that it’s not about the amount you start with but the habit itself. Building a savings routine now, while we have the flexibility to adjust and increase contributions over time, sets the foundation for long-term financial stability. A simple Graphic below shows how starting early makes the savings burden lighter and sets you up for a better future – I have never heard a client say, “I wish I would not have saved what I did when I was younger”.
The Importance of Setting Goals and the Difference Between Saving Vs. Investing
Setting clear financial goals is a critical step in any financial journey, but it’s important to understand the difference between saving and investing as you define those goals. Savings are typically for short-term objectives, such as building an emergency fund, saving for a vacation, or setting aside money for a down payment on a home. The primary focus is safety and liquidity—ensuring you have quick access to your funds with minimal risk.
On the other hand, investing is more suited for long-term goals, such as retirement or building wealth over decades. While investing involves greater risk than saving, it also has the potential for higher returns. By strategically investing in diversified assets, you can take advantage of market growth and compound interest over time, helping your money work harder for you.
In my role at Kindred Wealth Partners, I’ve seen how having specific goals transforms the abstract idea of saving into a purposeful and motivating practice. I like how the below summarizes saving vs. investing, and the associated time frames:
Overcoming Common Challenges
Saving as a young professional isn’t always easy. Complexities of saving and investing, rising living costs, student loans, and the desire to enjoy our 20s and 30s can make it feel like there’s never enough left over to save. But, planning, on your own or with a trusted advisor—however simple—helps navigate these challenges. Creating a budget, automating savings, and even exploring employer benefits like 401(k) matches are all practical ways to start building a cushion without feeling deprived. While maximizing your retirement plan contributions up to IRS limits is usually the best case, contributing at least up to the match is the minimum so you don’t leave any additional funds on the table:
Making Saving Personal and Enjoyable
Often, the conversation around savings can feel clinical and impersonal. But what I’ve learned through my work is that when clients personalize their savings strategy—aligning it with their values, goals, and aspirations—it becomes much more meaningful. For me, personally, I’ve found that having clear goals, like saving for travel or the freedom of when and how I retire, makes the act of saving feel more like an investment in myself rather than a restriction. It always feels like there is a light at the end of the tunnel!
How I Save:
I’d be remiss if I didn’t share my personal saving strategies and the reasons behind them:
- My 401(k): I make it a priority to contribute up to the IRS limits in my 401(k). Why? Because I apply the same financial planning analysis to my own life that we offer our clients. When I analyzed my financial situation to determine the best path toward the retirement I envision, maximizing my 401(k) contributions stood out as the most straightforward option. Once I set my contribution level, it’s essentially a “set it and forget it” strategy. My analysis indicated that I wouldn’t need to save an additional penny each year to achieve my desired inflation-adjusted spending in retirement. It’s simple and efficient!
- My Taxable Accounts: I keep my emergency fund, which covers six months of living expenses, in a high-yield savings account. In addition, I regularly contribute to my taxable investment account to save for short- to mid-term goals like travel or purchasing a new car when the time is right. While these savings don’t specifically target retirement, any surplus I accumulate for these goals can easily be redirected toward retirement or other priorities. The investment vehicles I use in taxable accounts are very similar to the advice we provide clients, in other words as we like to say at Kindred, “We eat our own cooking”!
Now, in thinking of the future, we all know that life can change. We typically review clients’ financial plans yearly, and the case will be the same for me. Saving allows for flexibility!
A Call to Action: Take Advantage of National Savings Day
This National Savings Day I challenge other young professionals to think about where they are on their savings journey. Have you started saving yet? Do you have clear goals? Is there an opportunity to optimize your savings plan, even in a small way? At Kindred Wealth Partners, we’re here to help guide you through these questions and create a plan that fits your life and aspirations. Remember, it’s never too early—or too late—to start saving for your future.