Financial responsibility is something all adults need to think about as soon as they can. At some point there will come a time when you don’t want to or simply cannot work anymore, so you need to financially prepare for your retirement. While in an ideal world everybody is ready for this, in reality not many people are adequately prepared. If you are using any of the following seven excuses to avoid financial responsibility, then take heed: If you don’t take care of your money, then it won’t take care of you.
Excuse 1: But I only live once!
Kids today use the excuse “YOLO,” or “You Only Live Once,” to spur themselves into trying new things. While the intent of YOLO is a good one – that is, so people can get out of their comfort zone and maybe discover themselves and what they are capable of – many have skewed the meaning into, “I’m going to die anyway, so let me buy whatever I want.” While it’s good to splurge once in a while, you also want to make sure you’re not doing it to the detriment of your finances. Yes, you only live once, but for most of us, it’s going to be a long life. There is time enough to enjoy many things in life, but you must also make sure you are financially solvent to do it.
Excuse 2: Retirement is so far away, I’m only 20!
People say that youth is wasted on the young and in the case of retirement saving and financial responsibility, that is very true. Being young is a great time to try new things, but you also have the best asset any investor can have: time. When you are young, you have time to let your investments grow.
Excuse 3: But I need a new car/clothes/shoes to look good and move up.
Nice things are great to have and generally last longer. A good car is definitely a good investment, especially if you plan to keep it for a long time. However, if you change cars each year and you can’t really afford it, you are just digging yourself deeper into debt.
Excuse 4: These are the things I need now!
Well, what are these things you need exactly? Sometimes, what we thinking we need now are not exactly needs, but stuff we want. For example, you’ve probably heard those commercials that say, “Cash out that structured settlement now! And get the money you need!” When a person has a structured settlement from an insurance or legal claim, he or she can go to a company that can give them a lump sum of money in as little as a few hours in exchange for waiting for the payments. Sounds good, right? Well, the truth is, when you cash out a structured settlement, you will lose a good chunk of money. Now, if you use the money to invest in an education or business to make more money for you, then great. If not and you just want to buy things now, then it’s a bad decision.
Excuse 5: I’m going to lose my money in the stock market anyway!
Yes, it’s true that the stock market is very risky and it goes down and up a lot. However, studies have shown that on average, the market can give you returns of up to 12 to 14 percent per year over a long time. That means if you start now, you still have time to ride out the bad years and come out on top.
Excuse 6: Oh no! I need to get my car/roof/plumbing fixed!
Stuff happens – that’s just part of life. While you can’t predict these bad things, you can always anticipate them. That’s why you need an emergency fund, so that when stuff like that does happen, you won’t be decimated and you can cover any immediate expenses. Start by saving up $1,000. That should be enough if you have to get you car fixed so you can get to work. However, you need to build up at least six month’s worth of expenses should something worse happen.
Excuse 7: My debt is too big, I’ll never get out of it.
There are many approaches to getting rid of debt, but the first thing you need to do is stop creating more. Live within your means and pay down your debt aggressively. For many people this is the first step to financial responsibility and, eventually, financial freedom.
Featured photo credit: Stop Financial Excuses via medexec.org