Why is it wise to start saving early?

Starting to save early is wise primarily because it allows individuals to take full advantage of compound interest. Compound interest is the interest calculated on the initial principal, which also includes all the accumulated interest from previous periods on a deposit or loan. This means that the earlier you start saving, the more time your money has to grow.

When you save early, not only do you earn interest on your initial contributions, but you also earn interest on the interest that has already been added to your savings. This compounding effect can significantly increase the total amount saved over time, especially when combined with regular contributions. The longer the money has to compound, the more substantial the growth will be, making early saving a critical strategy for building wealth and preparing for future financial needs.

Other options may mention aspects of financial management but do not capture the essential benefit of starting savings early as succinctly as the ability to leverage compound interest does.