Why Aren’t You Saving?

People have a lot of reasons for why they can not save money. Most of these reasons, just do not hold water. Let’s examine some of the biggest reasons for why people fail to save and see how many strike home with you.

I Do Not Make Enough Money

For many, the reason that they do not save is that they simply do not make enough money. For some people, this might actually be a valid point but it is amazing how many people with relatively high incomes make this excuse.

You do not have to make six figures in order to save and if you are waiting until you get into a higher income bracket like that to save, you are making a huge mistake.

The problem is that you will never make enough money to save. Typically what happens is that as your income increases, you find more and more ways to spend it.

Instead of waiting to make more money to save, realign your budget so that you can afford to save at least ten percent but preferably twenty percent of your take home pay.

I Am Too Young To Save

Another big reason that people fail to save is that they think they are too young to save. When you are in your twenties, you think that retirement is just too far away to worry about it. Live for today and retirement will take care of itself later.

The truth is that you will do yourself a huge favor by saving for retirement now. Every dollar that you stock away now in an investment account is worth far more than what it would be worth in the future. If you wait until you are thirty or even forty to save, you could miss out on ten to twenty years of compound interest.

I Do Not Want To Sacrifice

Some people choose not to save simply because they do not want to sacrifice anything. It is far more enjoyable to spend all of your money rather than do without something. This is self destructive behavior and is a habit that must be reversed in order to be financially fit.

The trick is that you must realize that you can not have everything. Even if you spend every penny that you have, there will be things that you can not have. So, no matter what, you will always feel like you can not get money for something. Learn to live one step below your means ans you will have the money to save.

I Need To Keep Up

In your little social or work circle, you might see your friends and colleagues getting things that you want. Nice clothes, expensive cars, fancy dinners out and big homes. If they can do it, you should be able to also right?

Trying to keep up with others is a huge restriction to saving. You have no idea on the financial status of others. Do they have a rich relative? Are others around you up to their heads in credit card debt? You just do not know but you can probably make some assumptions. Most people make very poor financial decisions. Just assume that the people you see splurging have staggering debt and do the opposite.

Stop worrying about what others are doing and concentrate on your own financial decision. Make smart move, save money and live just below your means.

I Can’t Picture Retiring

For some, retirement just seems so far away that they can not imagine doing it. After all, retirement is 40 or more years away for some. How do you know if you will even live that long?

I get it, retirement is decades away and who knows what will happen up until that point. If you wait too long though, you put yourself at a huge disadvantage. If you start saving early, you can do it gradually. If you wait too long, you will have to do some serious savings.

It basically comes down to making minor sacrifices now or major sacrifices in your later years. Trust me, it is much easier to make the minor sacrifices now that to get money to make big savings later.

I Have Too Much Debt

This is a good excuse and is not a good excuse, depending on your circumstances.

If you are drowning in high interest credit card debt, yes it makes sense to pay off that debt first. The average investment account is not going to earn you anywhere near the 19 percent or higher that the credit card companies are charging you. Pay this debt off first.

If the debt comes with a lesser interest rate, the decision becomes less clear.  An average retirement fund with a moderate amount of risk should be earning you 6 to 7 percent a year. If your interest rate is higher than that, make that debt a priority. Anything less than that can be paid back at an average pace, giving you room to save &  invest.

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