Myth #10 I Can’t Afford to Save
Financial Myth’s Blog Series
Unfortunately, much of the information relating to money that permeates our thinking as individuals and as a society is based on myths. This misleading information has no factual basis and can actually prevent us from achieving our financial objectives. This week we’re dealing with the fallacy that we can’t afford to save.
Follow along with us through the Financial Myths Blog Series. You may be surprised by what you discover about yourself and your financial plan!
Myth #9 – I Can’t Afford to Save
“I can’t afford to save!” If I had a dollar every time I heard that excuse, I would have millions of excess wealth! So, I believe there are six main reasons people don’t save.
They…
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Haven’t Prioritized saving
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Didn’t set goals
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Aren’t systematic
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Didn’t calculate what is needed to meet goals
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Procrastinate
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Lack a plan
Life is so busy that there is little time for tomorrow. We need to set priorities. Someday we will be old, we won’t be able to work, and we’ll wish we had choices. Financial success has zero correlation with how much you make; it has a 100% correlation with how much you save. Make your future a priority. You need to put it on your calendar!
We need to set goals.
People have told me they cannot afford to save for tomorrow since there is nothing extra at the end of the month! Later I see them driving a brand-new Dodge ram pickup off the parking lot because that is their priority. They can feel the powerful engine, see the shiny fenders, and feel good driving that Dodge! So, we usually fail to save because we lack the correct priority. Take time to set goals for your future excess.
Once you set a goal to save, we should make the process systematic.
A dollar in the checking account has a 16-day life expectancy. We spend it on shoes for Johnny, a weekend away, or a night out with friends. Money in a checking account gets spent – just a simple fact. So, be systematic, and set up an automatic draft out of your account that is treated like a bill, rent, or car payment. Set your savings to increase systematically every month.
Often success is not reached because we fail to comprehend what it takes.
A 20-year-old only needs to save $134 a month to be a millionaire at 65 with 9% return. A 55-year-old has to save $5,100 a month to be a millionaire at 65. Most 20-year-olds waste $134 over a weekend. If we start early, it is incredible how much we can accomplish. How would a 20-year-old know they should save $134 a month unless they measured it?
When is the best time to start saving?
Today! If we want a tree to grow and give us shade, today is a better day to plant a tree than tomorrow, next year, or next decade. Today is the day to plant the seed of your financial success. Start by prioritizing, understanding your goals, being systematic, and measuring what you need to do to meet those goals. Financial success is a little like eating an elephant, but I believe we could eat an elephant if we took the first bite.
Planning puts all these pieces in place and gives us a roadmap to stay motivated and on track. The time to worry and create a plan is today – no matter your age!
A financial plan is a path to success, choices, and less worry!
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