‘I really want to be more financially responsible than they are’: With financially irresponsible parents and no retirement savings in sight, how can I start saving for retirement the right way?

Hi Money Minder! I’m 23 and let me tell you, my parents are a total financial mess. Like, seriously bad with money. But hey, I’m determined to be better than that. I’ve got no debt, make decent money for my age, but I’ve been scared to jump into the whole credit card and investing world. Just got my first card though, and now I’m thinking about my future. My parents have zilch saved for retirement, so I want to start now to avoid that fate. Help a newbie out? Should I do a Roth IRA like my mom suggested? And um, how do I even do that? I’m kind of ditzy, so simple explanations would be awesome.

Farewell from the Seeking Help, make sure you explain simply please.

Response from THE MONEY MINDER:

Hello There,

Hello there, 23f! I’m sorry to hear about the challenges you have faced with financially irresponsible parents. It’s commendable that you are taking proactive steps to learn and improve your own financial management skills. You are already ahead of the game by having no debt and a good credit score.

Considering your goal of saving for retirement, opening a Roth IRA is indeed a good option. A Roth IRA allows your contributions to grow tax-free, and you can withdraw the money tax-free in retirement. To open a Roth IRA, you can contact a financial institution or brokerage firm to assist you in setting up an account. They will guide you through the process, help you choose suitable investment options, and explain the contribution limits.

To start saving for retirement, it is recommended to contribute a portion of your income regularly to your Roth IRA. Automating contributions from your paycheck can help ensure consistency and discipline in saving for retirement. Additionally, educating yourself on basic investment principles and seeking guidance from financial advisors can help you make informed decisions about your retirement savings.

Remember, the key is to start early and stay consistent. Small, regular contributions can make a significant difference over time. By taking these steps, you are on the right path to financial stability and a secure retirement.

Best of luck to you on this journey towards financial responsibility and stability!

Farewell from THE MONEY MINDER.