Be patient

Start small and increase gradually

Big things can grow from small seeds.

Don’t let big numbers scare you. It’s not unusual to see costs for a college degree of $50,000 and up or retirement savings needs of $500,000 and more. It’s easy to get discouraged by numbers that big.

Don’t panic. Start small and gradually increase your savings rate each year. Here’s an example for retirement savings.

Fred is 30 years old and makes $35,000 a year. He decides he can afford to have 2 percent of his paycheck deducted each pay period to be invested in his retirement savings plan. That’s $700 the first year, or just $13.46 a week.

With a year of experience under his belt, Fred decides he can increase his savings by another 1 percent the second year and he received a 2 percent salary increase, so he saves $1,071 the second year. He continues to receive 2 percent salary increases and increases his savings rate to 5 percent by age 33, which boosts his total annual contribution to $1,857 a year. He then continues to receive 2 percent salary increases and continues to save at the 5 percent rate until he retires at age 65.

As you can see, big things can grow from small seeds. Starting small may seem like you are doing very little at first, but small incremental increases plus patience can yield big returns.