We all want to save money better in our bid to reach our goals. Whether it is for early retirement, saving up for a baby, or even marrying the love of your life. These life plans do not come cheap and preparing for it means setting aside a considerable amount of money. But saving money is easier said than done especially with the health crisis at the moment.
This pandemic has forced a lot of people to re-evaluate their finances especially when a lot of them were caught off-guard. As businesses and companies tried their best to pivot around and save on costs, it resulted in a lot of people losing their jobs. Some companies shifted to online work which meant employees were able to work from home.
I don’t earn enough money to start saving
Your mindset plays a huge role in helping you save money better. If you start telling yourself that you will start saving money when you get a bigger paycheck, then you might not be able to begin in the first place. Yes, it is possible that you could be earning just enough and that you do not have much wiggle room in your budget.
But if you do not start saving money when your income is small, you will not be able to save money even when your pay gets bigger. What you are trying to develop at this point is creating that habit of setting money aside for the rainy day. As you do this, you can start with even the smallest amount of extra money you have.
Once you get into the habit of setting money aside, it will come naturally for you as the years go by. It would be automatic and you would be saving money without putting much thought into it. One thing that can help you a lot is automatically having a specific amount transferred over to your savings account. You make sure that the money is already in your savings even before you accidentally spend it.
I want to live life to the fullest
One of the most common excuses people have right now which prevents them from being able to save money better is Fear of Missing Out or FOMO. INC shares that there are people going into debt trying to keep up with their friend’s lifestyles. This mentality embraces the idea that you need to live your life every single day like there is no tomorrow. In a lot of cases, this can work to your advantage. But when it comes to your finances, it might not always be to your benefit.
You need to always live your life to the fullest every single day. Seize the day and all the opportunities it brings. Always let the people that matter in your life know how you value them every day. But when it comes to your finances, it would be challenging to live like a millionaire every single day. Especially if you do not have the money for it.
You will only end up in debt with an increasing amount you have to pay every month. Remember that when it comes to your finances, you can enjoy the fruits of your hard work without sacrificing your future needs. You just have to be mindful of what you spend and make it a habit to save and set aside money for future needs.
Debt payment comes first before saving money
It is true that you can save money better if you were not making multiple debt payments every month. That money could easily go over to your savings and quickly help you reach your goals. That being said, does it mean that you will go out and simply focus all your attention and finances on paying down your debt?
The key thing to remember in these situations is finding the balance. You need to pay down debt but you also have to set money aside to save for future needs. Choosing to simply do one over the other could put you in a challenging situation. You need to strike that balance where you meet your current financial obligations while continuing to save for your needs.
At the very least, make sure you are meeting the minimum payments on your debt obligations. This helps you stay away from paying huge interest, fees, and even penalties on underpaid amounts. It also helps you maintain your credit score which you might need in the future. While making payments, start saving a small amount. The important thing is to establish that habit you can carry on for years to come.
I’m waiting for a huge windfall of money
This is not something a lot of people can say with finality. It’s because you never know what will happen in the future. A wealthy relative could have promised you a huge inheritance in the future but that should not keep you from strengthening your own finances. Do not plan your financial future based on the promises of other people.
Save money better and take a proactive approach in taking control of your finances. Waiting to hit the lottery is not a solid financial plan. CNBC shares that you have a 1 in 292,201,338 chances of winning the Powerball jackpot. That is such a small chance to win the pot. You cannot plan your whole financial future in the hopes of winning the lottery.
The interest it earns is so low
When you decide to simply park your money in the bank in a regular savings account, there is a good chance that the interest rate will not make you a millionaire overnight. It might not even make a dent in your overall financial target. The least that it can do is keep your money secure giving you a place where you can park your finances.
But if you compare it to simply keeping the money at home, the small interest your money earns in the bank is way better. What if you put it in a high-yield savings account? You can then enjoy a better return on your money. If you are able to invest that money, you will then see a much better return on your savings. It can even help you reach your financial goals faster.
I’m too old to start thinking about saving money
One of the most common excuses people have when trying to improve their finances is their age. Particularly, people who are already advanced in age tend to brush off the idea of saving money because they do not have much use for it. They would prefer to simply live the remaining years of their life enjoying and living it to the fullest.
There is some truth to this but you still need to set some money aside even when you get older. You never know when you might need it. In fact, it is a lot more challenging to raise money for an emergency when you get old. You could end up selling assets you worked hard for. It can be your house, a business, or even some family heirloom you have held onto for a long time.
The same goes for young people who might just be trying to enjoy their first job out of college. The idea of trying to save money better is far from their mind. Especially with all the debt obligations on their shoulders. It can be student loans, credit card debt, and others. But the idea is that the earlier you start saving money, the better you can develop and form the habit of saving money. Also, you will have a lot more in savings you can use in the future.
It is tough to try and save money better especially when your excuses start to weigh your desire to improve your finances. You need to take a look at these excuses and find a way to get through them. Once you do, you can focus on your goals.