Money Under 30

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We all make tradeoffs, we trade our time for money, and we trade our money for time. So life is about making the right tradeoffs. We live in a world powered by convenience. Our love for convenience is so ingrained, its inherent goodness is so self-evident that we can’t imagine any other way. Why would any-one choose the hard way? Often however we fail to recognize, just how much convenience costs us.

The Cost of Convenience

If you’re reading this, good for you. It means that you’re at least willing to admit that you should get around to doing something about your money you are earning. You’re never too old, the best time to start is now. A 20-year-old making $40,000 per year puts 10% into a 401(k). If he gets a three percent employer-match contribution, he could save $1.7 million by the at age of 65. That’s not taking into consideration any raises or increased contribution over time. If you wait until you turned 33 to begin saving, however, the same contribution will only grow to about $790k. A goal to make is to try and save as much as you can each year. Okay don’t beat yourself up! If you feel you can’t do 10%, at least match what your employer match is offered. If they give you 4%, then match their 4%. We hear you; have no extra money to do so??

We’ve have heard this before, but answer this question. You drink coffee? If so, Let’s look at it from this perspective, your convenience of doing a pick up of coffee vs. brewing you own. Who hasn’t hit the snooze button? Running late in the morning, it seems much faster to head to Starbucks or another coffee place to pick up your brew. It’s only a couple of bucks—until you start doing it every day. When you factor in all the costs, drinking homemade coffee can save you one dollar or more per 16oz cup. In 10 years, that would add up to $4,000. If you drink a high—end cup every day, that could cost you $2.00 or more per 16oz cup. In 10 years that would add up to $8,000. So look for that match of your 401(k) from your earnings. If you brew your coffee instead of purchasing it, you’ll have extra money you thought you didn’t have. Start brewing your own, that’s not a bad hourly rate for the 8 minutes in the morning or so it takes to wash the pot and prepare a new filter for morning. By understanding the true cost of convenience, we can make smarter choices about how we spend our time—and our money.

 

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