Excuses, Excuses, Excuses

We have all used excuses for not doing what we should be. We do this to avoid being blamed or to avoid doing something we don’t want to.

It is no different when it comes to saving and investing as the majority of people have plenty of excuses as to why they aren’t doing either of them.

The thing is if they just started doing it instead of making excuses they would already be on the path to a more secure financial future. Anyone can reduce money problems and increase their financial security – they just have to stop making any excuses about it!

If you have said any of the following financial excuses recently, make a decision to change. Your future self will thank you.

Because “Nothing is impossible; there are ways that lead to everything, and if we had sufficient will we should always have sufficient means. It is often merely for an excuse that we say things are impossible.” – Francois De La Rochefoucauld

“I DON’T MAKE ENOUGH MONEY TO SAVE” – Bullcrap. So what you are saying is that if you made $1 less this week you wouldn’t have made it? Just by being able to access this article you are probably among the wealthiest people on the planet.

What you need to do is tracking where your money is going. You can go old school and write down every expense, or sign up for Mint.com and link your accounts. After a few weeks or a month of tracking it is almost guaranteed that you will find money leaks. Cut back on the things that matter least to you – cleaning supplies, utilities, and other boring things.

If you really cared about succeeding you would use every free moment to work towards making more money. Be that education, a second job, side-hustles, or something else. There is no excuse to be broke and watching Netflix all day. The wife and I turned $50 into $1000 because we were out there looking for deals that would bring us profit, not chilling on the couch. Get motivated and do it!

Once you have some money coming in, the Stash app allows you to invest small amounts every month – just $5 to start!

“IT’S ONLY 99 CENTS!” – Buying a candy bar, scratch ticket, or pack of gum is just a buck or two, what does it matter? Think of it this way, $1 spent unwisely adds up to $365 per year! That $365 invested per year at 8% will compound into $102,120 after 40 years! That $1 doesn’t seem so measly anymore. Whenever you have the urge to splurge remember what $1 can turn into if you invest it rather than waste it.

This same math means that it only takes $10/day to turn into a million in that same timeframe. Can you find $10 to save?

“TREAT YO SELF” – You work hard for your money so you deserve a treat. I get it, I buy things I want every once in a while too. The thing is that I don’t impulsively buy them. I research a little to make sure it is worth it, and then I search out a way to have it cost less. Coupons, rebates, discounts, cashback are just some ways to make those treats even sweeter.

“I’M TOO BUSY/I’LL DO IT LATER” – Sure you will. Just after you finish up watching the latest season of whatever show you are currently addicted to. The future you isn’t going to care that you watched the show, or even remember it, but they will see that nice amount of money sitting in your account. But only if you get started!

Saving and investing can easily be automated. It only takes a few minutes to create an automatic withdrawal into a separate account, whether that be an emergency fund or retirement account.

“I HAVE TOO MUCH DEBT TO INVEST” – Of course, if you have credit card or other high-interest debt it should be paid off before you invest. The savings on the interest is a guaranteed return. The exact interest rate where you would switch between focusing on paying off the debt and investing is personal but tends to be within the 4-6% range for most people.

Debt is an anchor that will hold you down, but as soon as you get rid of the worst of them you should start to invest.

“I’M YOUNG, RETIREMENT IS SO FAR AWAY” – I understand that ‘locking’ away money until you are old doesn’t sound too enjoyable. But starting to invest while you are young is the best thing ever due to the magic of compounding interest! At just a 7% rate of return, your money basically doubles every 10 years. So if you wait until your 30’s to start, you just lost an entire doubling period. That means hundreds of thousands of dollars.

“MY WORK DOESN’T OFFER A RETIREMENT PLAN” – That sucks, but it is no excuse to not put something away for your future self. The best thing to do in this case is save up to $5,500 per year in an Individual Retirement Account. There are two types, Traditional and Roth. The Roth IRA is most likely the best one for you as it allows the money to grow tax free.
Since money put into a Roth IRA has already been taxed, you can remove it without penalties. The only thing you can’t freely take out is any gains that money has earned. Think of it as a backup emergency fund!

“I’M TOO OLD” – I don’t think it would be a pleasant thing to realize one day at age 60 that you have nothing saved (According to the Government Accountability Office, 29% of Americans aged 55 or older have no retirement savings or pension).

Still, you can’t just throw your hands up in the air and give up – it’s time to get extremely serious. This means cutting your expenses to the bone and working as long as you can. You might even purchase a multi-family home so that you can live in one unit and rent out the others. A smartly purchased rental property could leverage what money you do have into a cash cow that earns you rental checks in excess of your mortgage and costs.

If you are able to delay filing for social security until age 70, that could mean over 30% more per check than a person who filed early. Of course, you should expect to live at least into your mid 80’s to come out ahead, as those who took social security early have years of pay outs you would need to make up for.

While not ideal, having 5-15 years of money saved up is better than having nothing at all.

“I DON’T UNDERSTAND THE STOCK MARKET” – Heck, most people don’t understand how a smart phone works but we all have one. The answer is to just invest in an index fund. An index fund is an investment vehicle built to match a stock market as a whole or sectors within. The most highly recommended is a total stock market fund from Vanguard.

Even investing wizard Warren Buffett has stated that “Just making monthly investments in a low-cost index fund makes a lot of sense”.

Plus it is wrong to assume the only way to invest is through the stock market. There are other ways to invest, such as real estate, cryptocurrencies such as Bitcoin/Ethereum/STEEM, or even Lego box sets (No joke! They are said to earn about 10% per year). I am not saying these other ways of investing are easy to understand, but everyone thinks in a different way. It is possible that some of these alternate ways of investing might just click in your brain.

“THE STOCK MARKET IS RISKY, I DON’T WANT TO LOSE MY MONEY” – Nobody likes to lose money. I don’t, but I still invest every month. While the stock market might do down in the short term, over the long term it has always gone up. In fact, by keeping your money in the bank you are losing purchasing power due to inflation.

If this still doesn’t convince you, invest in solid dividend-paying companies. That way it will hardly matter if the value of your investment goes down, a solid dividend paying company has survived multiple recessions and continues to pay quarterly checks to its shareholders.

I hope that if you have been making any of these excuses my reasoning against them has kick started some motivation to stop procrastinating and start securing your financial future.

Because if you aren’t saving and investing you are just treading water at best. You are not building a better life for your future self. If you aren’t putting some money away for yourself you won’t end up with much to show for all the years of hard work.

Think of it this way: saving and investing is not depriving yourself, it is buying the best thing of all – your freedom!