Savings: Money that we put aside for when we need it. It's something most people believe in, yet so few actually manage to save enough. According to an August study by the Bureau of Economic Analysis, personal savings was 3.7 percent of disposable personal income.
We give many excuses for not saving enough. Here are some of the most common ones and what we can do to overcome them:
1. I've never been able to save. If you think you're unable to save, you'll likely take steps so that it becomes true--essentially sabotaging your attempts at saving. The first step is to change your mindset and truly believe you have the ability to save money.
2. I don't make enough to save. Yes, it is harder to save when you don't make much money. But unless you don't have enough for a modest place to live and basic food, you probably have the ability to save a few dollars each month. Look to cut out small expenses, like lottery tickets and convenience-store soft drinks, and you may be surprised by how much you can save.
3. I have too many debts to be able to save. This is typically based on a falsehood, because systematically paying off debt is saving. As the amount you owe goes down, so does the amount of interest you pay each month. So each month that you lower your debts you put yourself on a better financial footing. The real trick is in not taking on new debt.
4. I don't know anything about money. Add up your bills and your income so you know what money is left over to be saved. Often people who say they're not smart enough to track their debt believe there's some big secret to saving money--there isn't.
5. I don't have the willpower to save. There's likely some truth to this for everyone. Few people demonstrate willpower to cut discretionary spending at every chance in their lives. But even people who are dealing with addictive spending behaviors can identify when they're most vulnerable. They can then create tools to bolster their willpower for those situations. Even if it takes professional help, saying that you can't overcome it shouldn't be your final answer.
6. No one can save in this economy. It's true: It's harder to save when wages are down and prices are up. But any change in income or expenses is a signal to review your budget and make appropriate changes. If you wait for times to get better, you might never think there's a good time to begin saving money.
7. Prices are rising too fast for me to save. Rising prices may mean you have to temporarily adjust the amount you save each month. However, that's no excuse to stop saving entirely. In fact, when prices are rising you have even more need to stock away money. You're more likely to be surprised by the size of a bill when prices go up. That's one of the reasons that you saved money--so you can handle the unexpected bills.
8. My spouse makes it impossible to save. True, it's easier to save when both partners participate. It's also true that if left unchecked, a spending partner will sink a saving one. Don't need to let that happen to you. If your partner is unwilling to save, separate your finances. When your partner's finances crack, they'll be glad that you managed to save some money for the two of you.
Gary Foreman is a former financial planner who founded TheDollarStretcher.com. The website features thousands of articles to help stretch your day and your dollar.
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