To be human is to make excuses sometimes. It’s hard to face difficulties head on, so our brains attempt to give us a little relief by making an excuse. But when it comes to personal finance, the small dose of relief you get from making an excuse is inevitably short-lived. Why? Because excuses hold you back from addressing the root of your problems, which in turn stops you from implementing actual solutions.
Though it often feels challenging to get this process started, it feels great to take strides toward fixing your personal finances—going above and beyond “band-aid” excuses that make it easy to keep living in denial. Here are five common excuses of which consumers should be aware.
Excuse #1: I can always save for retirement later.
It’s all too easy to separate “now” and “later” in your mind. Well, I need this money now, you may think. I can always worry about retirement as I get closer to it. The problem with this line of thinking is that the best long-term financial strategies capitalize on compound interest.
Compound interest means the money you invest in a retirement fund collects interest, and then that money collects more interest. Basically, your interest racks up interest. This is why it’s so advantageous to start saving as early as possible.
Business Insider illustrates compound interest in action with two example consumers: Susan and Bill. Susan saves $5,000 annually between the ages of 25 and 25. Bill saves $5,000 per year between the ages of 35 and 65. Though Bill saves for 30 years compared to Susan’s 10, Susan ends up with more money come retirement time—over $60,000 more, in fact.
Of course, it’s optimal to save consistently throughout your career starting early so you can reap the biggest reward of compounding interest.
Excuse #2: I’ll start budgeting next week, month, year, etc.
One of the easiest excuses to make is that we simply don’t have time to sit down and parse through our financial situation. It’s true that most of us are busy with work, school, family obligations, hobbies, traveling, etc. But, as Millennial Money points out, “It’s fairly easy to take 20-30 minutes a month to devote to planning and managing your finances.”
Start by blocking off a half hour within the next week. Make “a date” with yourself to get acquainted with your finances. Put it in your calendar. Follow through. Then make this a recurring event, either weekly, biweekly or monthly.
Excuse #3: I have too much debt to really make a dent in it.
Saddled with crippling debt? At some point, it’s easy to slip into the mindset that you owe so much money, nothing you do will really make a dent. It’s important to avoid self-defeating before you even explore the debt relief options available to you. For instance, a heavy-duty solution like settlement may help you—reading Freedom Debt Relief reviews reveals that many consumers with serious debt have found success through enrolling in a structured program.
There’s no such thing as “too much” debt. It’s all a matter of finding the most suitable option for your circumstances.
Excuse #4: The problem is that I don’t make enough money.
Feeling limited by your income? It’s helpful to think of savings goals and expenses in terms of percentages. No matter your income level, there are always cost-cutting measures to try: eating at home rather than in restaurants, eliminating pricey subscriptions, downgrading your phone plan, taking public transportation, etc. It’s less about how much you make and more about how you use it.
Excuse #5: I’m just no good with money.
If you feel like throwing in the towel, remember that financial literacy is an ongoing process—not a destination. The only way you’ll get better with money is through experience and being open to learning new tricks and tips. Just like you should set aside regular time for budgeting, set aside time to consume relevant personal finance content. You can listen to podcasts, read articles on the internet, watch YouTube videos, etc.
Making any of these excuses won’t fix your personal finances. Only developing solid money habits will do that. So, what are you waiting for?
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