It seems that every time you turn on a talk show or news program, an economist is making dire predictions because Americans are not saving enough. No one plans to live out their golden years as a Wal-Mart greeter, but with a large portion of the American workforce living from paycheck to paycheck, that may be the sad reality. The truth is that pretty much everyone—no matter how low-paying your job—can put money aside for a rainy day. Have you ever heard one of these excuses coming out of your own mouth? If so, take the time to really think about your money habits and budget. Your future self will thank you.
1. I don’t make enough money to save. Nonsense! No matter how small your paycheck, you can always find a little wiggle room. Even putting away as little as $10 per paycheck will get you started—and will you really miss it? Set up an automatic transfer and you’ll never even know that money is gone.
2. I want to enjoy my money now, while I’m young and can really appreciate it. The individuals who say this are such optimists! They assume that they will continue to enjoy good health and job security, among other things, throughout their lives. While I would never look to frighten anyone away from having an enjoyable life, I also know that the new car, plasma TV, Caribbean vacation and enormous house are all going to be cold comfort if or when the money runs out. Plan for the worst, hope for the best, and put some money away. You can still enjoy life without spending every cent.
3. I need to pay off my debt before I can start saving. This is an understandable response, particularly for black-and-white thinkers who do best with one goal at a time. But just like having a baby, there is never a perfect time to start saving. You deserve to have a savings cushion whether or not you are completely debt-free. So funnel a little money toward savings while you continue to knock out that debt.
4. I don’t need to save money because I’ll inherit. Okay, not everyone will be in the enviable position of this excuse, but even those future heirs and heiresses really should make sure they create their own savings, because relying on others has a nasty habit of biting you.
5. Why save when the interest you earn is so low? It is true that interest-bearing savings accounts have depressingly low rates, but what kind of return on investment will you get by buying something with that money? Just because savings plans aren’t ideal doesn’t give you license to spend your entire paycheck.
6. I contribute to my 401K, so I don’t need to save. While it’s wonderful that you are putting money aside for retirement, you still need to have savings that you can access before you get your AARP card.
7. I don’t save because I hate thinking about this stuff. Everyone has “grownup” stuff they would rather ignore or forget about, and finances are a biggie. But as easy as it may be to stick your head in the sand rather than actually work on your financial plans, it will only make things worse in the future. Do some research, read a book, meet with a financial planner—whatever you have to do to make taking control more palatable.
8. I’m too young to worry about it. There is no age minimum for savings. And when you think you’re too young to save, you’re probably enjoying the most disposable income you’ll ever have, as you don’t yet have a family, a mortgage and other bills to take care of. Pay yourself first!
9. Why do I need to save when I have a credit card for emergencies? I do use my credit card for emergencies, but I also pay it off every month, so I never have to wonder if I’m too close to the limit to put the tow-truck charge on it, or how I’ll pay for it once the emergency is over. Yes, credit is a great tool, but having money to pay it off is much more secure.
10. I can’t take it with me when I go, so why save? While this is true, it ignores the fact that you can make your life a great deal more comfortable if you leave yourself a cushion of savings. And wouldn’t you like to leave a little something for your loved ones?
It all comes down to the fact that you really want to plan for the future and rely on yourself. So go get yourself an online savings account and start saving.
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