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Why Aren’t You Saving?

Saving money with piggy banks.

Saving is not something that comes naturally for most people. With money in hand, it is usually the last thing that comes to mind even though we all know how important it is. There is always an excuse to why we don’t or can’t save. Here are some of the most common excuses. How many of them do you use?

1. I Don’t Make Enough Money Yet

This is a fairly common one. You feel that you do not make enough money now to save but when you start making more money, you will surely start socking it away.

Well, what happens if your income fails to increase like you thought? You would have missed out on some good years of savings and all of the compound interest that went along with it.

Besides, what generally happens in these situations is lifestyle creep. As you make more money, you always find a way to spend it by making your current lifestyle a bit better. Every extra dollar that comes in goes to a new expense to keep up with your friends and colleagues.

Unless you are below the poverty line in income, you have the ability to save. If you make decent money but can not find any to save, you need to adjust your budget so that you are living within your means. Make saving first and base your standard of living off of your post savings money. If your take home pay is 5000 dollars a month, save 20 percent or 1000 dollars and use the remaining 4000 dollars to pay your living expenses.

2. I Want A New Toy

We love our toys, shiny new gadgets and spending money in general. Immediate gratification is a powerful emotion and feels way better than saving money. Why put 500 dollars in a savings account when I can have the new model Apple watch now?

This is something that you just need to learn to get over but it will be tough. Spending is just too easy and we are constantly being tracked and bombarded with advertisements, good ones too. Initiate a waiting period on larger purchases. The amount will depend greatly on you and your income bracket but an example might be 100 dollars. If you want to buy anything over that amount, you need to wait 24 to 48 hours. If you still want it and can afford it, you can buy it. This gives you a cooling off period that will prevent you from making those oh so costly impulse buys.

3. My Income Just Went Down

A drop in income often comes with a drop in savings. This is natural as we generally want to  keep living the same way that we always have.  If the loss of income is temporary, only expected to last a few months, that is fine.

If the loss of income is long term, you need to make a budget adjustment. Saving is a must so you need to lower your standard of living to suit your new budget. This might mean making some tough decisions but they need to be made. The largest part of your budget is probably going to housing and transportation and these are where you can make some big cuts. If you rent, it might be time to look for a cheaper place. If you own a home, a refinance might reduce your payment or it might just be time to sell your home and find something less expensive.

4. I Have Too Much Debt

Debt such as student loans or credit cards, can be crippling but it needs to be managed.

Consolidation might be the answer. It can lower your payment on your student loans and your credit cards. This alone could give you enough money to start putting something in savings.

Outside of consolidation, you can also help eliminate that credit card debt by utilizing a motivational strategy such as Debt Snowballing. In this strategy, you pay minimums on all but the lowest balance card. You then pay as much as you can on that one. The theory is that you are able to pay off cards faster which is motivating.

Keep paying those cards down the best you can and eventually, you can start a healthy savings plan.

5. There Is Plenty Of Time To Save Later

A lot of people think that there is plenty of time to save the needed money for retirement, so they put it off. After all, retirement might be 30 or even 40 years away from now, why the rush.

The earlier you save the better though because of compound interest. If you save 1000 dollars now, it is better than saving 1000 in ten years because you would have missed out on 10 years of interest. At a very modest 5% growth, 1000 dollars would be worth over 1600 dollars in 10 years and well over 4000 dollars in 30 years. See the power of compound interest?

If you do not start saving now, you will be playing catch up later and you would also have to contribute more money to get the same level of savings.

6. My Parents Are Wealthy

Do your parents have money and are you not saving because you expect to get a nice inheritance? Well, things can change and it is not a good idea to rely on others for your future financial health.

What if your parents make some bad investments and lose money? What if they decide t simply spend most of their money during their own retirement? What if you simply fall out of their graces?

Just because your parents have money now does not mean that they always will and it certainly does not mean that you are going to get it.

Start saving now and you have the added security of not having to rely on anyone else for your future. If you get a nice inheritance in the future, all the better.

7. I Was Never Taught To Save

Savers come from savers. If you saw your parents save, you are far more likely to have been taught to save and you will probably do it yourself.

If you were never taught to save, it will be a little less natural to you but you can get the hang of it. Make it a point to change the behaviors that are ingrained in you. Learn to save for your future and so that you can help your children learn this important habit as well.

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