Being a new graduate can be exhilarating. Starting your first ‘grown-up’ job, getting a taste of being an adult, and most importantly, receiving a real paycheque, are all very exciting. When you’re starting your career, putting away some of that hard-earned money to save for retirement might be the last thing you want to do. Starting your retirement savings early is always your best bet, but it can be hard to figure out what you should prioritize when you are also facing the reality of paying off your student loans. Saving for your future while also trying to get out of debt can be complicated, but it is possible with a little planning and effort.

Here are four ways to make saving easier:

1. Start small
When it comes to saving, everything counts – if you can only afford a small contribution, go for it. Even if it’s just $50 each month, getting into the habit of saving will benefit you when you have more to deposit. And with compound interest, a small amount of money today can become thousands of dollars by the time you are ready to retire.

2. Track your spending
Understanding where and how you use your money is a significant step in finding additional funds to put in savings. Track every dollar you spend for a few months and really watch where you’re spending it. There are a variety of apps available that you can download to help you track, but you can also use a spreadsheet or just old-fashioned pen and paper. Once you have a good idea of what you are buying, you can identify areas to spend less or cut out altogether. Then you can reallocate it into an interest-generating savings vehicle, like a tax-free savings account (TFSA) or registered retirement savings plan (RRSP).

3. Understand how much you actually need to retire
The nice part about being young is that you have lots of time to plan and save for retirement. But the idea of putting away money that you won’t be able to access for decades can be hard to face when times are tight. Having a specific number to work toward can help motivate you to start early and keep up with your savings plans.

There are calculators available online that can get you started. You enter some financial information like how much you pay into government programs (Canada Pension Plan, EI etc.), expected contributions through other retirement plans, and a few other personal details, and it will give you your estimated retirement income based on what age you plan on retiring. You can then use this to inform your savings goals and timelines.

Retirement Income Calculator

4. Take advantage of programs offered by your employer
You worked hard to get that great job when you finished school, and you should take advantage of all the things available for you at your new company. If there are retirement savings programs like a group RRSP program, pension plan, or investment options and savings plans like group TFSAs, sign up as soon as you are eligible. Participating in a group plan, especially if it offers any kind of contribution matching, is a great way to build the habit of saving. Automatic payroll deductions, if available, make this kind of savings plan even easier to manage, with the funds never even touching your bank account.

While there are many traditional savings options available, like RRSPs and TFSAs, many employers are exploring innovative new products to help encourage their employees to make responsible financial choices, like making payments on your student loans. For example, Great West Life recently rolled out a student debt savings program created for people unable to participate in a group retirement plan because they’re paying off government student loans. When you make regular payments towards your debt, you’ll get a matching contribution to your group plan. Talk to your HR department to learn more about what options are available to you.

When it comes to saving for retirement, the earlier you can start, the easier it will be. Follow these tips and make as much of an effort as possible. As your financial needs change, you can adapt your strategy along with it so that your savings grow along with you.

For more information, contact the Cowan Financial Services team at 519-651-6660 or 1-877-899-2194, email: wealthmanagement@cowangroup.ca.