Now that a new year is underway, it’s time to reflect on what can make it great. While you want to set reasonable goals that are likely to stick, don’t forget to concentrate on what’s holding you back.
In some cases, improving your financial situation is less about trying to create resolutions you’ll actually keep — and more about getting rid of the excuses holding you back.
Before you try to set high-minded financial goals, you’ll need to figure out which excuses you’re using, and banish them from your vocabulary. Only then will you have the freedom to really improve your financial situation.
To get you started, here are three common excuses that everyone needs to stop using:
1. “Investing is too complicated.”
One of the financial excuses I hear most often revolves around why my acquaintances aren’t investing. “It’s too complicated” and “I don’t feel comfortable picking stocks” are the worst offenders. Basic investing, however, is one of the most effective ways to grow wealth over time.
The reality, too, is that it’s not complicated — especially if you avoid stock picking. You can open a brokerage account with as little as $25 and invest in index funds or index ETFs. An all-market fund lets you take advantage of overall market performance over time, without the guesswork.
While it makes sense to educate yourself and learn more about investing, this is a great stopgap to get started. As you feel more comfortable, you can change the way you invest.
2. “I don’t have enough money to start saving/investing.”
At one time, I used this excuse myself. But as mentioned above, you can start investing with as little as $25. If you can free up $25 or $50 a month, that’s a start. And it’s much better than nothing. The same is true of saving, whether it’s for a vacation or an emergency fund.
The important thing is to start developing the habit. Find a way to save $10 a week, and put it in a savings or investing account. You might be surprised at where you find the money and how easy it is once you get started. You’ll begin to look for ways to boost your contributions, and as you earn more money, you can increase the amount you save and invest.
3. “I’ll never get anywhere with my job; I can’t make more money.”
It’s true that working harder doesn’t always lead to more money or a promotion. Having a dead-end job can be demoralizing, especially if you’re like many Americans and haven’t had a raise in a long while. However, by telling yourself that you’re stuck in your job and can’t make more money, you’re guaranteeing that is the case. Stop making this excuse and look for ways to get out of the rut.
You could start a side hustle, or think of other ways to boost your income. Are there particular skills or certifications that could lead to a pay raise? Would acquiring more knowledge or expertise make you marketable enough to find a new, better job?
Don’t resign yourself to your current fate. Take matters into your hands and destroy these excuses in the new year.
What excuses do you hear (or make) a lot?
Editor's Note: I've begun tracking my assets through Personal Capital. I'm only using the free service so far and I no longer have to log into all the different accounts just to pull the numbers. And with a single screen showing all my assets, it's much easier to figure out when I need to rebalance or where I stand on the path to financial independence. They developed this pretty nifty 401K Fee Analyzer that will show you whether you are paying too much in fees, as well as an Investment Checkup tool to help determine whether your asset allocation fits your risk profile. The platform literally takes a few minutes to sign up and it's free to use by following this link here. For those trying to build wealth, Personal Capital is worth a look.