Save early and set yourself up for life

Having a savings account stuffed full of cash doesn't happen overnight. It takes years to build, as the supersaver slowly and consistently tucks money away. 

It tracks that the earlier you start, the faster your bank account will puff up into something you're proud of. If you're not already a saver, then this is the article for you.

We'll step through why early savings matter, what actually happens when you start early, how compound interest changes everything and how you can build savings habits that feel achievable.

Think of it this way: time is the most valuable resource your money has.

When you start saving early, your money has more time to grow. A metaphor that's often used to describe growing wealth is planting a tree. It takes years of sunlight, water and nutrients to grow into something that bears fruit. If you plant that tree when you're 20, you'll be picking apples sooner than if you plant it at 40.

What this means is that a small amount saved early can outgrow a larger amount saved later. And yes, the math does math. Check it out. 

Imagine two people: 

Madeleine, who saves CHF 50 per month starting at 20 years of age, and stops saving at 35. Then there's Mathieu, who puts away CHF 300 per month starting at 35, until he reaches 65.

Assume a modest 6% return and guess who ends up with more money at 65?

Madeleine, even though she invested a fraction of what Mathieu did. What's her secret weapon? Time. Her money had 45 years to grow and Mathieu's money only had 30. 

In a nutshell, let time do the work so future-you doesn't have to.

If saving early is the superpower, compound interest is the sidekick that helps make things happen.

As far as definitions go, here's a great one: compound interest is what happens when your money starts working harder than you do. 

Firstly, you earn interest on your savings. Then your interest earns interest. Then that interest earns interest. Suddenly, your savings are supercharged. It's like your savings are saving too. 

Why compounding works best for early savers

Compounding will dazzle eventually, but savers should expect a slow burn at first. Most growth happens in the final stretch. So, starting early isn't about saving huge amounts but more about letting the compounding roll for as long as possible. 

Let's look at what happens to savings of CHF 100 per month at different starting ages (again assuming a 6% return). If you start at: 

• 20 - CHF 185,000
• 30 - CHF 97,000
• 40 - CHF 48,000.

The exact same contribution is being made monthly with a completely different outcome. It's like a snowball -- the longer it rolls, the bigger it gets.

Many people think saving is hard and that you should be sacrificing everything unless you need it for survival. That's just not so. While you might give up some things that fall into the nice-to-have category, it'll be worth it later on. Saving early gives you more freedom later and the sooner you start saving, the sooner that freedom arrives. 

In the short-term, having savings tucked away means you have the rainy days covered. If unexpected expenses crop up, you're prepared. If you lose your job, you have a little cash cushion to get you through. If you need to travel urgently or relocate, you can afford it without going into debt.

A little later down the track, you'll have more savings in the bank and even more freedom. Hate your job? You can quit and take a break while you find a new role. Got an entrepreneurial dream? Back yourself and invest in your business idea. Fork out some cash to study or relocate, or go to a yoga retreat and realign your chakras. The choice is yours, because you can afford it. 

Finally, you'll start approaching the peak, and this is where the magic really happens. Your savings have snowballed and now you have real options, like retiring early, building generational wealth and passing it on and living a stress-free life because your money is completely under control. 

Saving has one obvious benefit, but it isn't just about the money. It's about building good habits and exercising discipline. When you apply yourself and see your money grow as a result, you be rewarded in many ways. 

It's a confidence booster and creates a sense of control. You have a clear understanding of what you're spending and what you value most and your decision-making capabilities are strengthened.

Saving isn't about restricting yourself or your lifestyle. It's about learning how to manage your money instead of letting your money manage you.

How much should you save?

There's no must-save amount, because it's not about how much you save, it's about saving consistently. The amount you can manage, with essential and everyday expenses taken care of, will compound over time. If you're just starting out, that amount might be as little as CHF 20 per week – and that's better than CHF 0. Remember, save consistently and the passage of time will do the rest. 

If you're just getting started, aim to save between 5-10% of your monthly income. If times are tough, try to manage 1-2% until the situation improves. You should increase your savings rate as your career progresses and your income grows. 

Kiss your piggybanks goodbye and think carefully about where you're going to put your precious savings. This matters a lot, so pay attention.

The first savings milestone is the accumulation of an emergency fund. This is the cash that acts as  safety net and will cover you in case of unexpected expenses. Aim to save 3-6 months of living expenses and keep it in a high-interest savings account. You'll have the option of withdrawing the money in an emergency, but if it remains untouched, it'll be earning interest and growing. 

Your retirement fund should be ticking along as you progress through your career. The way you save or contribute to your retirement depends on where you live, so be sure to take the time to understand how you can make mandatory saving work in your favour. Often there are huge tax advantages, which is basically free money.

Once your emergency fund is in place, you can start building long-term wealth through investments. This is another way to experience the magic of compounding. Do your homework and choose ETFs or index funds that suit your goals, and remember to reinvest dividends.

Saving shouldn't make life miserable. Though you might be dropping your daily cappuccino, you can save towards short-term goals that will motivate you. Travel, new tech gear or moving apartments are some things that you can save relatively quickly for. When you're boarding that aeroplane or unboxing your new laptop, you'll realise that saving was worth the effort.

Most people don't start saving early because of mental barriers, not financial ones. 

One of the most common excuses is, "I don't earn enough to save". The truth is, you don't need a high income to save. You just need to establish what you can afford, even if it's CHF 20 per week, and put that amount away consistently. 

Another favourite excuse is, "I'll save when I'm older". If you take this tack, you're wasting precious time. We know that the later you start, the more money you need to save. 

A lot of people say, "I want to enjoy my money now". And they can. Saving and budgeting doesn't mean you can't have any fun at all, but it does mean that you'll have more fun and flexibility later in life. It's all about finding the balance. 

Finally, we know the concept of saving can be overwhelming, with echoes of, "I don't know where to start". That's okay. Start small, start slow. Open a high-interest savings account, calculate the amount you can afford to save (aim for 10% but any amount is okay to begin with) and commit to a cadence of paying that amount to yourself. 

Starting is the most important step.

One of the best tricks for early savers is setting up automated payments. This works well because you don't need to exercise any willpower or discipline. Saving will become effortless because the banking system will do it for you.

Set up a transfer from your everyday bank account into your savings or investment account. This usually works best if it's right after payday. You won't see the money, so you won't miss it. 

Money can have incredible impacts on mental health, positive and negative.

Saving early helps build feelings of security and independence, and optimism for the future. Once you see growth in your savings account, your dreams start to feel more attainable. 

Financial anxiety is a very real thing. Somewhat surprisingly, it often comes not from lack of money, but from lack of planning. Early saving eliminates that uncertainty and increases your sense of control. 

Let's take a look into the crystal ball and see what lies ahead if you start saving early enough.

At 30, you'll have: 

• a solid emergency fund
• early investments already compounding
• confidence in your financial skills. 

At 40, you'll have:

• real financial stability
• the option to make big life choices without panic
• investments that have nearly doubled.

At 50, you'll have:

• the type of wealth that can't be built overnight
• security that protects your family
• choices, not pressure.

Finally, at retirement age, you'll have:

• freedom
• comfort
• options
• the life you built, not the life you settled for.

Starting early is a way of building a financial life that feels expansive, without being restrictive. 

If you're already feeling behind, get started right now. Here's your beginner-friendly blueprint. 

• Step 1: Track your spending for one month to understand your money movements
• Step 2: Build a starter emergency fund of CHF 500-1,000 for rainy day expenses
• Step 3: Automate a small amount into savings
• Step 4: Increase your contributions as your income grows
• Step 5: Learn the basics of investing
• Step 6: Review every six months to appreciate how far you've come. Take a moment to acknowledge your efforts and work out a (low-cost!) way to reward yourself for being consistent and building something future-you will thank you for.

The content in this article is provided for educational purposes only. It does not constitute investment advice, financial recommendations or promotional material.