The following is a collaboration with Andrea from Saving Joyfully. 

Meet Andrea

Hello everyone, my name is Andrea, and I am the writer and creator of Saving Joyfully. I had a recent conversation with Michael, questioning if he had any advice for my readers on saving for retirement. In a recent post, I had written I was interested in linking to some material from Michael’s website.

The reason that I reached out to Michael is that I have spoken with him in the past regarding what he does for a living. Michael, unlike me, actually is an advisor. I like to seek financial advice for my readers from advisors on topics related to saving for retirement and financial management because I am not a finance expert.

While I am not a finance expert, I am an expert on my own life and the mistakes that I have made. I love to encourage others to prevent some of the financial mistakes that I have made and to begin to get their financial lives on track.

Why Saving While Young Is More Important Than You May Realize

My Experience 

My own experience with not starting to save money early is the reason that we decided to collaborate on this post. I told Michael that I would be happy to share my story from the perspective of why I believe that you should start to save earlier and not wait as I did.

When I was younger, I was warned multiple times by various people in my life that I needed to start that 401k. I can still hear the conversations play out in my mind, and I still remember the specific people who advised me that this was important. I really never saw it as a necessity despite their warnings.

I always struggled with my debt and with my everyday expenses like food, rent, and gas. What 20-year-old needs to worry about saving for retirement anyway? I was so wrong because what was a year, turned into two years and then ‘gasp' I was 29! It was January 2012, when I finally started my very first 401k.

I cringe just writing it today and admitting to myself that I waited this long. You know what though, I am not alone in this and I know some so many people have never taken that first step. If you are one of them, I beg you not to make the same mistake that I did and start to save today.

The reason that I did not prioritize starting my 401k though is sadly so prevalent. I had debt, a large amount of debt, and a small income. I saw no urgency saving for retirement because I saw myself as way too young to start saving for it. Unfortunately, though that is such a false misconception that many have. When you are younger, it is the best time for you to begin to save for retirement.

The younger you are the more time that money has to grow and the interest to build and, in my case, I had another fantastic benefit I lost. A 3% match that my company offered that would double up to 3% of what I put in each paycheck. For eight years, I worked for this same company and never opened that 401k and never took advantage of that 3% match.

Do you know how much money I lost out on?

I will never know, and I will be working to build up those retirement savings for many years. I know now that I will never reach what I could have if I had just listened to the wisdom of others. Well enough of my regrets. I will allow Michael to share with you the essential things that you need to know about starting to save for retirement.

Andrea, Thank You for sharing your experience.

My Take

It is widespread for young people starting to focus on paying down debt, as opposed to saving for retirement. Many prominent financial “gurus” such as Dave Ramsey advocate for paying down debt before saving for retirement.

However, there are several reasons why some may be better of saving before paying down debt too aggressively.


Income Taxes are one of the most overlooked aspects of financial planning and budgeting. What many financial gurus often miss is small reductions in taxable income can usually pay larger rewards than you may realize. A contribution to a tax-deductible retirement account could qualify for a 50% percent tax credit or reduce out of pocket health insurance premiums.

Many young people feel they cannot afford to save; however, if a 1,000-dollar contribution to an IRA saves you 500 dollars or more, I would argue you cannot afford not to save. See: Tax Planning Not Just For The Rich

Save More Later Myth

Some individuals in the financial media claim that it is better to pay down debt now and save more in the future. However, paying more in the future may not ever equal saving some now. As Andrea mentioned, not only will miss out on years of employer contributions, you could be missing out on valuable tax deductions and credits. Additionally, you are missing out on years’ worth of compounding interest, dividend reinvestments, or growth.


Life has a way of throwing us curve balls we don’t expect. No one ever told me they expected to get divorced, disable, sued, etc. Many times, having some assets saved up, as opposed to being debt-free puts you in a better situation to handle what life tosses your way.

I have seen times where people attempt to pay down debt too quickly, and then ultimately are forced back into debt because they didn’t have the financial means to handle an unexpected bill. See:  Surviving Financial Disasters

Creating a budget

When you create a budget, you should focus on setting some money aside for emergencies. Also, you should estimate tax and create a tax plan. Once, you have optimized your, taxes and have some emergency funds, then and only then should you tackle debt aggressively.

About the Author

Andrea Joy is the writer and blogger behind, where she helps others learn to live a more joyful life on a budget. She hopes to inspire and change others views on money, accumulating debt, and managing their finances through her story.