You wouldn't want to find yourself in your 50s, broke and without retirement savings. As time flies by very quickly, it's never too early to plan for retirement. You can actually start saving for your retirement even when you're still in your 20s.

 

According to the financial site Money MSN, planning for retirement isn’t a "walk in the park" because for many people, debts are high while income is low.

 

Money MSN gave some tips on how one who is living on or near the edge can slowly battle his way to financial freedom:

 

(1) Start early.

 

If you are in your twenties, time is on your side if you decide to plan for retirement.

 

Financial independence will not be merely a dream if you begin saving money early and start building the foundations of your financial empire.

 

Tip: Starting early is the formula to an early finish.

 

(2) Try long-term savings.

 

If you are 25 years old and you start saving P2,000 a month for 40 years, you will have almost P1,000,000 by the time you are 65 years old. 

 

This may not seem an easy thing to do as it requires discipline. However, once you’ve gotten the knack of saving first before spending, this will be a breeze.

 

Tip: Save up an amount each year that you can commit to. Think of setting aside something that will not hurt your budget for your basic necessities.  

 

(3) Live within your means.

 

Just because you were promoted or your paycheck was doubled doesn’t mean that you automatically have to change your lifestyle.

 

Live simply, making sure that all your basic necessities are covered. Don’t spend your money on things you won’t have any need for later on.

 

Tip: Be wary of your money and how you spend it. Assess first before buying something whether it will be worth it in the long run.

 

(4)  Get health insurance.

 

You never know when you might be involved in an accident or contract an illness.

Getting a health insurance is thus a smart move especially if you don’t have a big emergency fund.

 

A health insurance will give you a peace of mind as it covers a lot of "unforseen events."

 

Tip: If you only have a little amount left for savings every payday, it would be practical to spend it on health insurance.

 

 

(5) Keep putting money into your retirement fund.

 

If saved more for the month and you don’t have anything particular to spend it on, just add it to your savings.

 

Doing so may not seem much but in the long run these small amounts will add up. This habit might even allow you to retire earlier than planned.

 

Tip: You can try alternative methods like getting a 50 percent cut from the extra earnings instead of putting it all into your savings. This way, you can still spend on simple pleasures life has to offer.

 

 

(6) Roll the dice.

 

Being young has many advantages, such as having some "leeway" for mistakes.

 

Try the stock market instead of putting all your savings into your retirement funds. You might just find yourself retiring way ahead of schedule.

 

Tip: If you’ve been “rolling the dice” for too long without fruitful results, it’s time to quit the slot machine and go back to the retirement savings plan. 

 

(7) Be strategic with debts.

 

Make sure that you steer clear from debts especially those which make you pay interest.

 

The interest you pay for your debt is money wasted and will only hurt your path to a planned retirement.

 

Tip: Prioritize paying off debts that have the biggest interests. Once you have dealt with these debts then you can start focusing and reprioritizing your other debts.

 

(8) Pay attention to your credit scores.

 

A high credit score means you’ll have less of a headache with your financial life.

 

Not only will you pay lower interest rates and be easily approved for loans, this also leaves more money for your savings.

 

Tip: Pay your bills on time and use credit only when needed.

- Andrei Medina, VVP, GMA News