Do you find yourself saying that you don’t have enough money? Is it hard to find the pennies necessary to pay the bills? Saving money can be difficult at times for a lot of reasons. Whether it is because you are stuck in contract to lease a car or can’t stop yourself from buying the latest, greatest item, it can be hard to save money. The simple fact is that it is hard to postpone gratification when you get a “high” right now.
It isn’t always the consumerism or the impulse purchases that keeps people from saving money. In fact, it was just recently that a reader commented that it’s hard to save money when they barely make enough money to pay the bills. Do you have to make a ton of money to be able to save any significant amount? While it may be easier to save money when you have more of it, having a low salary does not discount you from saving money. The important principle in understanding how to save money is that every little bit helps… even your milk money.
How I Learned to Save Money
When I think back to my childhood, it makes sense why I am already saving for my retirement in my mid 20’s. When I was in elementary school, my older brothers were middle school and even high school. Like any youngest child, I wanted to be just like them. One brother had a real job and another a few baby sitting gigs. I was too young to have a job, but old enough to know that I wanted to buy things. With no allowance, I was left with one option: milk money.
Everyday I was given $.40 for a carton of milk. Over a standard week, that equated to $2. While that may not sound like a lot to you (or me now), to a 10 year old child, that’s a lot of money, especially for something that I didn’t need. While I still love chocolate milk to this day, I made a decision that saving the money and buying something bigger was more valuable to me than drinking milk every day. I never did tell my parents this because I was afraid they would stop giving me milk money. Slowly, but surely, my piggy bank filled up and I could buy my own toys. I know what you are thinking…”Didn’t your parents buy you toys?” Sure, my parents would buy us things, but they also wouldn’t spoil us. Certain things we were required to buy.
Excuses Why People Can’t Save Money
There are many excuses that people give when they say they can’t save money. Here are the top 10 excuses that I have heard, in no particular order:
- I don’t make enough money
- I have to pay off debt
- I have too many expenses
- I really needed this or that
- We live on one income
- I pay too much in taxes
- I’m in college (which is kind of a combination of #1 and #3)
- I have kids (the implication is similar to #3)
- I’ll earn more in the future and be able to save more
- I didn’t start saving early enough
I could continue on, with numerous variations of several of these excuses. Many of these I have heard over and over again. In some sense, I understand people’s situation. My wife and I both work and don’t have any kids, so it is easier to save money than others. Or, at least that’s what I am told to believe. My wife and I also have our own obstacles to save money. I don’t make very much money and we live in one of the most expensive areas in the country. A great example of the higher cost of living is this: I pay more than twice the amount in rent (for my 1 bedroom apartment) that my in-laws pay for their mortgage payment on their 3 bedroom home.
“If you find yourself saying to yourself that you can’t afford to save money right now, you are lying to yourself.”
Everyone has obstacles to save money. While I recognize that there are legitimate reasons to prevent people from saving money, there are also many decisions that you can make to save money. If you find yourself saying to yourself that you can’t afford to save money right now, you are lying to yourself. Most of our obstacles to save money are not forced upon us, but are based on decisions that we have made – whether those are decisions we made yesterday or years ago. I think when we are honest with ourselves, we will realize that we can choose to save more money. It’s just that we don’t value saving as much as whatever else we would have to give up.
- If you are the one that can’t save money because you have too many expenses, get rid of your expenses. Whether that means moving to a cheaper apartment or home, using one car instead of two, eating out less frequently, etc. We all have places where we can save more.
- If you are in college, consider getting another job in college to help pay your way through college. Or, consider lowering your expenses. Live with a couple roommates, eat cheap food, etc.
- If you find yourself saying that you really needed a new computer, smart phone, or an I-Pad, think again. These are luxury items. You can get by without them. It just means that having the best technology means more to you than saving for our future.
- If you have kids and can’t find a way to save any money, you might be spoiling your kids. Spending all of your extra money on your kids is not only bad use of your finances, but teaches them a horrible lesson.
- Choosing to have one adult stay home, whether it is to take care of children or another reason, is a just that: a choice. Many families still prioritize saving even though they have one income. It’s just a matter of increasing your income and lowering your expenses.
The “Secret” to Saving Money (or Saving MORE Money)
While I could go on and on, about different situations of saving money, the “secret” to save money is to make it a priority. I’ve already discussed what it means to establish financial priorities, but it really does start with that. Anyone who wants to start saving money needs to begin with understanding the value of saving money. The old phrase of “delayed gratification” is true in this instance.
Benefits of Saving Money
The value of saving money comes in what is offered – or the benefits. While you could summarize it to be “financial security”, that is pretty vague and doesn’t fully illustrate the true benefits of saving money. Here are some of the popular ones:
- Protection from expensive emergencies
- Early retirement
- Other flexibility in your career (the option not to choose the highest paying job)
- Less stressful upbringing for your children (i.e. paying for their college, etc.)
- Peace of mind
- Ability to stay at home with children
How Value Saving Money
It may be as “simple” as placing more value on the future benefits of saving money, sometimes life gets busy and it’s hard to focus on the benefits of saving money. It’s hard to convince yourself that it’s better to save the money for the future than enjoy a new car. Here are some tips to keep you on track in the busyness of life:
- Set Financial Goals – This is a great way to keep you working towards something tangible. You can review my financial goals if you need inspiration.
- Reward Yourself for Saving – A small treat can be a great way to motivate yourself to save money
- Review Your Budget Monthly – Keeping up with your monthly budget, including tracking your expenses can help keep you accountable. Before you know it, you may enjoy evaluating your success each month. I know that I do!
- Track Your Net Worth – While a lot of people place a lot more value on this than I do, it is a great indicator of whether you are saving or not. It can also be fun to track your progress.
- Visualize Retirement – Another great way to motivate yourself is to visualize your retirement or future financial security. Post a picture that captures your ideal retirement, like a picture of the beach or a golf course. This will help you focus and maintain that priority.
- Don’t keep a wish list – I’ve said this before, but the worst thing you can do in regards to saving money is to think about things you are going to buy someday soon. If you are looking at the items, you may convince yourself in a time of weakness that you “need” it now.
Learning how to save money is just one of the many life lessons that responsible adults need to embrace. It will not only offer you the much needed financial security later in life, but will ultimately mean distancing yourself from the consumerism that drives our society. No matter how much you buy, it won’t satisfy you. The earlier you learn this and the earlier you start saving, the better off you will be.