Life Stages > Starting early makes it easy

Starting early makes it easy

Pauline is 18 years old and in her first job. She has strong reasons for wanting to get her money sorted as early as she can – when she was in school, her Dad got sick (he was only in his fifties) and had to give up work.

After that it was always a struggle for the family. Her parents didn’t have many savings and the family had to go without a lot. Now that her Mum has retired, it’s even harder for her parents trying to make do on the pension. Pauline doesn’t want to be in that position again.

She starts a savings scheme with $20 per week. She knows that if she increases the amount each year to allow for inflation and doesn’t touch the savings she will have around $75,000 by age 65. She’s making it her business to learn about the best way to invest that money once its grown.

Glossary: pension
An income paid at regular intervals to a retired person, by a government or through an employer superannuation scheme.
Glossary: inflation
Inflation - is the rate at which the prices of goods and services increase over time. The effect of this is to reduce the purchasing power of money. For example, if you could buy something with $1000 now, in one years time, you would need $1020 to buy that same thing (assuming 2% inflation).