Millions of Americans young and old find themselves in a similar situation- they have little or no money saved for emergencies and retirement. It’s a dilemma that more and more Americans are facing as wages fail to grow, but expenses just keep surging.
We know how important saving for retirement is here at Building Financial Freedom, but we also know how hard it can be to get started building wealth for the future. If saving was easy, we wouldn’t be here discussing the five reasons you still haven’t saved any money for retirement.
Life gets difficult and our mind tells us that we still have time to save money, just not today. It’s common to put retirement on the back burner because we always think there’s more time. Well, unfortunately time is not unlimited and the later we start saving, the more effort it will take to catch up.
In an effort to help you face the music, I want to lay down five of the most common reasons people fail to start saving for retirement.
5 Reasons You Haven’t Saved Any Money
1). Delayed Gratification
Think about the world we live in for a minute and it’s easy to see why saving money is such a daunting task. Our world revolves around instant gratification more than it ever has.
Everything happens in seconds these days. Send a text-get an answer immediately. Need the answer to a question? Search Google and find it in .0815 seconds. Our lives have become so fast paced that were now used to seeing benefits right now.
Saving for retirement is the complete opposite of that mindset. It takes decades of saving small amounts to reach the point of gratification and we’re not used to that anymore. We’re increasingly thinking solely about today and not the future.
2). “I Don’t Have Any Money To Spare”
Ask ten people with no savings why they haven’t started yet and chances are nine of them will say it’s because they have no money left over after paying the bills.
Most of the time they’re not lying. Mortgage, heat, lights, insurance and water take the majority of our income right off the table before we ever see it. Discouraging as it might be, there’s always room for saving and some tweaks to your budget can open up a few bucks to sock away for retirement.
The key thing to remember is a little bit is better than none. Start out saving five dollars a month in a retirement account if that’s all you can afford. Once you realize that you don’t miss the money, you can start to plug more holes in your family’s budget and ramp up the savings.
If you find that there are no holes to plug (highly unlikely), try doing something to make a few extra dollars each month that you can put away in your retirement account.
3). “I Have Plenty Of Time”
It’s common for young adults to fall into this line of thinking. When were young and still naive to the world, it’s easy to think that we have plenty of time to save for retirement. We think since we’re just starting our adult lives, it’s okay to waste money and live a little because we always have tomorrow.
You probably do have tomorrow but the thing is- each “tomorrow” that goes by is one more we can’t get back. Life doesn’t wait around for us. The clock keeps ticking and once the batteries die, there’s no replacing them.
It’s important that we start out early to maximize the benefits of compound interest. The more years our money is gaining interest, the more money we will have when our working days are over and we can spend time doing the things that really matter to us.
4). You Want What Your Friends Have
In today’s society, with everyone using social media and showing off their material “things”, it’s easy to get caught up and try to compete with them.
Your Facebook buddies are showing off their new wheels, so naturally you have to get a better car. The neighbor just got an in ground pool, so yours has to be bigger and better.
What you dont see is Mister Jones just took on $40,000 in debt for that new car and the neighbor sacrificed a few months of retirement to enjoy a nice pool on the hot summer days.
5). You Don’t Know Any Better
My parents told me growing up that I shouldn’t invest because the stock market is risky. They also never saved a dime for retirement because they were under the impression thats what social security was for.
I was never taught the importance of saving money while I was growing up. Luckily I’m a smart guy and learned at a young age just how important saving for retirement is.
Some people never realize it until late in life and are left scrambling to save up enough money to meet an always rising cost of living. If you’re reading this, now is your chance to get started building a retirement account.
How To Overcome All Five Reasons You Haven’t Started Saving For Retirement.
Overcoming these five things that are keeping you from saving for retirement is simpler than you might think.
1). Take five dollars out of your pocket right now and put it in a safe place.
2). Add another five dollars every week until you have a few hundred dollars.
3). Deposit the money in the bank and open a retirement account with one of the discount brokerages online.
4). Work your way from five dollars a week to ten and so on. It gets easier once you get used to living without that five dollars a week.
It’s simple in theory, but in practice it can be easier said than done. The key is to get started so you can see the power of compound interest. Once you start to realize the benefits of saving for retirement, it will get much easier to put money away each week.
If you need more convincing read why I think saving for retirement should be mandatory.