It’s too easy to come up with excuses for not saving enough money and getting ahead financially. You don’t earn enough. Your student loan debt is suffocating. You need new clothes. Your furniture is old. Your kids are expensive. And the list goes on. But unless you’re going to inherit millions of dollars, it’s probably best that you start making financial choices today that will bring you the financial security you deserve.
Here are eight common excuses that are keeping you from financial success. If these sound familiar, it’s time to make a change.
1. I Can’t Afford to Save
It’s not uncommon for people to believe that they don’t make enough money to put a portion into savings. Even some workers at generous income levels feel this way.
“The culprit behind this excuse is usually lifestyle inflation,” said David Melnyk, a financial planner with Verus Wealth Management. “As someone earns more, they often feel they are able to spend more. Spending money on things that make your life fulfilling is totally necessary and important to do, but make sure you aren’t cashing out your dreams and goals in the process.”
To combat the slow creep of living expenses, craft a budget that will help you to save and stay on track.
2. I Can Always Save Later
It’s easier and more appealing to live for today and not worry about tomorrow. And it’s one of the biggest reasons many people fail to take action and save. Jason Hull, a certified financial planner who blogs on myFinancial Answers, offered a powerful antidote for that line of thinking.
“Imagine your future self as if you were watching a movie,” he said. “Think about the potential negative outcomes, like having to retire early because of a disability, and watch the movie of your future self based on what you’re doing now. This will help (you) think of that future self as a family member and make (you) want to do something about it. We need to convince (our present selves) that our future selves are both important and fallible.”
3. It’s Too Complicated
“If you are not sure how to begin, start by investing a small amount from each paycheck into the target date fund that corresponds with your future retirement date in your company’s 401k plan,” said Lawrence Solomon, director of investments and financial planning at OptiFour Integrated Wealth Management.
“If you want to invest on your own outside of a 401k, start with a simple broad stock index fund that tracks the Standard &Poor 500,” he said. “Index funds have very low costs, are extremely tax-efficient and can be purchased with low minimum initial investments. With investing, simpler is usually better.”
Two of the most important tenets of successful investing are also the most simple: Set aside savings consistently and get started. There’s no need to be paralyzed by indecision. Low-cost index funds that track market performance consistently perform well over the long term, said Solomon. Warren Buffett also advises investors to hit up these funds.
Of course, there are no guarantees and past performance is not indicative of future success.
4. I Just Need to Get This Out of the Way
Whatever “this” is — graduate school, a wedding or something else — it’s keeping you from a sound financial future.
To put the brakes on this kind of procrastination, Trevor Ewen of PearfotheWeek.com, a personal finance and investing blog, urged individuals to “put together a financial projection of the cost and personal investment” of whatever the excuse or event is. “Then, use this exercise as a stepping stone to other financial action.”
In other words, use the urgency of an immediate financial goal, and take that same enthusiasm and determination to longer-term financial goals. This will help you plan and save beyond the needs of a looming deadline.
5. I’m Waiting for Less Market Volatility
Would-be investors eyeing the stock market these days might be using the recent volatility as an excuse to stay on the sidelines. Or, some might say they don’t want to invest right now because the market is too high, or it hasn’t hit bottom yet or they want to wait until it goes back up to get in.
Solomon has a name for this behavioral pattern: “I call this the timing excuse. There is no such thing as market timing, only market mistiming. We have met with several people who are 100 percent in cash and have been using this excuse since the Great Recession to avoid getting into the market. In the process, they have missed out on more than 200 percent of gains in the U.S. indexes over the last six years, and their portfolios will likely never be able to recover from those missed opportunities during their lifetimes.”
Solomon said that inflation will eat up people’s purchasing power in time if they’re not invested in the market properly. “The returns on cash and other ultra-conservative investments have never historically kept pace with inflation. So if you are in cash or Treasury bills, you are not preserving your capital in real terms because the price of everything you will need in the future is going up and your purchasing power is shrinking over time.”
6. It’s Impossible to Get Ahead
You are in charge of how you spend, how much you earn, how you invest and other financial decisions. By claiming that life is unfair or the game is rigged, you ultimately end up shirking your responsibility to instigate positive change. Be accountable for your money-related decisions, and watch how empowered you will feel.
7. I’m Afraid to Face My Financial Fears
People who stockpile their student loan bills or credit card statements under the bed — unopened — are probably familiar with this fear. Confronting their financial reality is a first step toward gaining security.
“People don’t want to fail,” said Josh Nelson, CEO of Keystone Financial Services. “They are afraid that they have procrastinated too long and it’s too late for them. The truth is that it is never too late to do the right thing. People can make up for lost ground quickly if they are committed enough.”
Go ahead and face your financial situation head on. See where you stand today so you can start making a plan that will help you move toward the future you desire. Track your spending and earnings. Include your monthly bills and short-term and long-term savings goals. Make the adjustments necessary to bring your financial life back into balance.
8. I’m Too Busy
“Probably the most common excuse that we hear is ‘I don’t have time right now,'” said financial consultant Trent Huston. “(What) they are actually saying is ‘I won’t make time right now.’ The statement undermines their efforts to improve because they have prioritized improving their finances below other things that they do have time for.”
A sound financial future should be your goal and a priority. But time slips away and financial plans get deferred again and again. To break the cycle, investment advisor Steve Lewit of United Advisors said, “Ask yourself: ‘If I keep doing what I’m doing and I don’t change, will I get all stressed out or worried?’ If the answer is yes, then an action needs to be taken to relieve the stress.”
Bring urgency to your financial goals. Resolve to stop making excuses. Realize the connection between your financial actions today and achieving your desired future.