Many people do not have any savings available at all, but instead of being worried about their lack of a financial safety net, they make excuses for putting off saving for even longer. Not saving can cause considerable financial pain down the road, so it is important to put as much money as you can into savings on a regular basis to ensure that you can handle any financial emergency that comes along. Here are some of the worst excuses for not saving money.
Savings Account Interest Rates Are Too Low
Low returns on savings accounts are not a valid reason not to save money. Although the interest rates for savings accounts are currently near zero, you will still need to have money put away for your future needs. It is not fun to look at your savings account and see how little it is earning, but you have to remember that the purpose of having money in savings is to be there when you need it, not to earn you a lot of money.
I Need To Live A Certain Lifestyle
People want to live a certain lifestyle and can spend every dime chasing that lifestyle instead of cutting back and placing more money in their savings account. For many people, paying for their child’s nanny, day care, or private school takes priority over saving for the future. A better approach is to forgo club dues, private schools and exotic vacations, and instead save money for college tuition and retirement.
I Have To Pay My Child’s Expensive College Tuition
Financing a child’s college education can be very expensive, and even though you want to do everything you can to help your children to succeed in life, the cost should not come at the expense of saving for your future. Do everything you can to help your child find alternative financing, such as scholarships, grants, and private loans that they can be responsible for. Encourage your child to consider in-state schools or even schools that are close enough that they can live at home while attending college to minimize the cost of their college education.
My Adult Children Need Financial Help
Sacrificing your future to subsidize the quality of life of your adult children hurts both generations. It is much better to require these adults to be financially independent. Your adult children will have to learn to live within their income and take steps to increase that income if their current earnings do not meet their current needs. You should focus on saving for your retirement and for unexpected financial emergencies that may occur in the future.
Join our newsletter
Subscribe to get the latest "Engineer Your Finances" content via email.
[…] Saving money is much easier when you do not have to think about it. Automating your savings to occur as soon as you get paid will reduce the risks that you will forget to put the money into savings or that you will spend the money on something else. Many employers make automating your savings very easy by allowing you to direct-deposit your paycheck into several accounts according to your predetermined allocation percentages. If this is not an option with your employer, you may be able to schedule a transfer of the amount you want to save from your checking account to your savings account using the online features available on your bank’s website. […]