The short answer is as soon as you can. The earlier one starts saving, the more time your interest works.
Let’s consider two savers: Saver A and Saver B
From the age of 25, Saver A puts € 2,000 per year into CC Momentum savings plan for 10 years until he is 35. At 35 he stops putting new money into his savings and lets his savings work alone.
Saver A then leaves his savings grow until he reaches 65. He earns an average annual return of 8% and when he looks at his account 30 years later, he has €314,870.
Saver B, does not save anything until he is 35, at 35 he starts saving €2,000 per year. He keeps this up for the next 30 years until he reaches 65.
Saver B earns an average annual return of 8%, too but he ends up with € 244,691 at the age of 65.
To recap:
- Saver A has invested a total of € 20,000 and ended up with € 314,870
- Saver B has invested a total of € 60,000 and ended up with € 244,691
Yet Saver A is now worth 28% more than the Saver B even though Saver A only invested 1/3of the amount and time.
Conclusion
Saving in the early years does count and although initially the amount might seem minuscule, the effects are seen in the later years. Starting to set something aside at an early age will give your savings time to grow and produce a compound interest multiplier effect that will help you in the later years.