What recommendations would you offer to someone who is trying to break poor financial habits and save money in order to achieve his or her financial goals?

Question

What will be an ideal response?

Answer 1

Answer: Recommendation one: First, gain an understanding of how compounding works–that as the number of years and the interest rate you earn go up, so does the future value of an investment.
Recommendation two: Think of savings as a "snowball effect." You earn interest on your initial investment, and those interest earnings and the initial investment both continue to earn interest. When these earnings are extended over multiple decades, your money can really add up. In other words, you want to start investing as soon as possible.
Recommendation three: Pay yourself–your future self, that is–first. To make this process as painless as possible, automate the payments so that when your paycheck is deposited into your bank account, a percentage is automatically transferred to a separate investment account–perhaps your retirement account. Or ask your employer's payroll department about a mandatory payroll deduction. It is much easier to save the money that you never really see!