The number one most common mistake I see young people make is that they think they don't need to start saving until they get older. This is completely wrong.
Getting an early start on savings can pay off in a big way. The gift of time and compound interest is one of the greatest you can give yourself.
Compounding happens when earnings on your contributions get reinvested to generate their own earnings, which also get reinvested to create more earnings, and so on.
Over time, compounding can add a lot of fuel to the growth of your savings. For example, if you invest just $100 a month, over 40 years you will have put aside $48,000, but it will actually be worth about $186,000 (assuming about 6% annual return). If you can save $125 a month, after 40 years, you'll have $232,000!
— Kate Ryan, wealth management advisor with TIAA