Bruce Helmer and Peg Webb

Saving isn’t just about setting aside money — it’s about forming habits that can shape your financial future. Yet many people delay saving, waiting for the “right time” or assuming there will always be enough in the future. The reality is stark: Time is the greatest asset for building wealth, and every year of delay can significantly impact your results.

Let’s explore why saving early is essential using the principles of behavioral finance and a simple $500 monthly savings plan.

Waiting to save carries a big cost

Compounding interest, often called the eighth wonder of the world, makes saving early one of the most effective strategies for wealth creation. When you invest, your returns generate additional earnings over time. The longer your money stays invested, the more exponential the growth becomes.

Consider two savers:

• Saver A starts at age 25, investing $500 monthly for 40 years at a 7% annual return. By age 65, they have $1,197,811.

• Saver B delays until age 35 but invests the same amount for 30 years at the same return. By age 65, they only accumulate $612,947.

The difference? More than $584,000 — a direct result of delaying just 10 years. The lesson is clear: Time matters as much as, if not more than, the amount saved.

How your brain gets in the way

Why do so many people delay saving despite the obvious benefits? Psychology offering insights into how many biases impact our financial decisions, and how we can shape better outcomes:

Living for today: People often prioritize immediate gratification over long-term benefits. Spending $500 today on dining or entertainment feels more rewarding than saving for a retirement that’s decades away. Automating savings, such as setting up recurring contributions to a retirement account, is a proven way to counteract this bias. Once automated, saving becomes effortless and avoids the temptation to spend.

Fearing risk: Behavioral research shows that people fear losses more than they value equivalent gains. For instance, investing during volatile markets may feel risky, but not investing is a silent loss. Delaying savings means losing out on the power of compounding and the potential to grow your wealth. Reframing savings as “gaining future security” rather than “losing money now” can help shift this mindset.

Tricking your brain to save more: People categorize money into different mental “buckets,” like spending, saving, or investing. Creating a dedicated account for savings — separate from checking — reinforces the habit. This strategy simplifies the decision to save and makes the money feel less accessible for everyday expenses.

Looking for small wins: Achieving small financial milestones, such as reaching a $10,000 savings goal, can help boost motivation. Many studies suggest that celebrating incremental progress can make long-term goals feel more attainable. Dollar-cost averaging — investing fixed amounts regularly — helps maintain consistency while smoothing out market fluctuations.

Anchoring to your dreams: Setting clear, emotionally resonant financial goals — like funding a dream retirement home or supporting your child’s education — creates an anchor that motivates savings. Visualization can transform saving from a chore into a meaningful pursuit, helping you stay focused on the bigger picture.

Pricing procrastination

Simply by virtue of waiting 10 years, Saver B, who started at age 35 in the example above, missed out on over half a million dollars of wealth accumulation. Procrastination is one of the most expensive financial mistakes individuals can make.

Here’s another way to frame it: for Saver A to reach $1,197,811 by age 65, they only invested $240,000 of their own money over 40 years. The remaining $957,811 came from compounded growth. Saver B, starting later, invested $180,000 over 30 years but only saw $432,947 in growth. Time, not effort, created the greater difference.

Your future self will thank you

Building wealth doesn’t require dramatic actions — just small, consistent steps. By understanding the psychological barriers to saving and adopting strategies to overcome them, you can take control of your financial future.

Start now. Automate contributions, set clear goals, and commit to a disciplined savings habit. The earlier you begin, the greater your reward. Wealth doesn’t just happen — it’s built by those who act.

Finally, for personalized guidance, consider consulting a financial adviser who can help tailor a comprehensive financial plan to your unique circumstances. Every dollar you save now is an investment in your future security and freedom.

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on WCCO 830 AM on Sunday mornings. Email Bruce and Peg at yourmoney@wealthenhancement.com. Securities offered through LPL Financial, member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment advisor. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL Financial.