Thursday, 2 May 2013
Excuses You Should Not Give For Not Saving
The time to save money is now, but many people fail to do so for trivial reasons, SIMON EJEMBI writes.
When it comes to financial planning, the saying that delay is dangerous is applicable, experts warn.
They stress that whether you are planning for your children’s future, to build your own home or to seek further education, the time to start is now.
According to them, waiting for the ‘right’ time or until needs arise only puts you at risk of being overwhelmed with your financial obligations. This, in turn, can deny you financial freedom and cause you a lot of problems.
While experts note that there are acceptable reasons and situations under which it can be impossible for you to save money.
‘They stress that many people who do not save are capable of doing so. The problem is that they are more comfortable coming up with excuses instead of making minor adjustments or sacrifices to secure their financial future.
Some of the common excuses people give for not saving, according to experts, are highlighted below. Though they may be common, experts advise that you should avoid allowing them to prevent you from saving.
‘I will save later’
This is perhaps the most common excuse people give for not saving. Some of the excuses discussed below also express a similar sentiment – now is not the right time. But if you do not start now, when will you start? If you are waiting for a promotion or a raise, what will happen if you lose your job? What will you do in times of emergency? What will you do when a great opportunity presents itself? Borrow? Even if you are creditworthy, the process of getting a loan, especially from a financial institution, makes it less suited for emergencies than your personal savings. This, according to experts, is a lame excuse for not saving money.
‘I am still young, too young’
As explained earlier, the time to save is now. Financial experts advise parents to teach their children about money – saving, budgeting, investing, etc – from an early age. When this is done, they won’t come up with this excuse in the future. Stories abound of millionaires who started their businesses when they were in secondary school, yet there are young adults who insist they are too young to save. Experts say no one is too young to start saving money and the earlier you realise that the better for you.
‘I have my retirement savings’
Many people consider their retirement savings to be enough. They will tell you that saving part of their salary is enough sacrifice. It is true that your gratuity or pension is a form of saving. And it is also true that it can take care of a lot of things. But you have to ask yourself, is it going to be enough to take care of you after you retire? If you retire at the age of 55 and you get to live until you are 80, will your retirement savings or pension fund be enough to take care of you till then? You should also bear in mind that unlike your personal savings, you may not be able to get access to your pension funds until you retire. So, what happens in times of emergency? When you take all ‘things’ into consideration, you will realise that this excuse is not good enough.
‘I can’t save’
This is one of the most common excuse people give for not saving. They will tell anyone who wants to know straight-faced that they don’t have the willpower to save. Each time they tried, they failed. As a result they assume that it is not in their nature to save. The implication is that by believing that they are incapable of saving, they unconsciously sabotage their efforts to save.
‘I need to earn more before I start saving’
With the minimum wage at N18, 000 and the price of items soaring now and then, many people have difficulty taking care of their basic needs. For such people it can be hard to save. And many of them conclude that the only way that they can save is if their earnings increase. Experts, however, say instead of concluding that they have to earn more before they save, a better approach is for them to understand that earning little doesn’t mean they cannot save; it only makes it difficult for them to do so.
They say it is only when people have difficulty feeding or getting decent accommodation that they should consider waiting for things to improve before saving. According to them, people who wait for a better paying jobs or an increase in their earnings before they can save often end up wanting an even higher pay to do so.
It is also noteworthy that while some people really don’t make enough to save, there are many people who do, but insist they don’t. For such people what is needed is for them to learn to trim their budgets and save the extra money.
‘For emergencies, I can always get a loan’
Oh! So, you have ‘unlimited’ access to loans; friends and financial institutions are always willing to give loans and as a result you see no need to save. Well, experts say while it is cool to be creditworthy and even though there are times when it is okay to borrow money for major projects, it is not cool to borrow money for personal expenses such as changing the tires of your car. If that is the case, experts say you are getting your finances all wrong. They say having savings is a better option to borrowing, which may come with interests. They also warn that borrowing can put you in a lot of trouble and make you lose everything. There are people who have lost their homes because they used it as collateral to collect a loan they really didn’t need.
‘Times are hard’
Many people blame their failure to save on the economy. “Times are hard. There is no money anywhere,” they say. But the state of the economy is no excuse; surely there are Zimbabweans who saving even though their economy is not in the best shape. The truth is that waiting for the times to get better means you will seize all attempts to save until then. Considering that up to four years after they recession, things are not better in many countries, basing your decision to save on better times may mean you may not save anything, until it is too late.
‘If I don’t take care of myself now, when will I?’
Some people live for today. Tomorrow, they believe, will take care of itself. Their argument is that if they don’t enjoy themselves now, if they don’t spend their money giving themselves treats now, when will they? Financial experts agree that as long as it is not at the expense of your future, it is okay for you ‘live it up’ now. Unfortunately, they say once you get stuck with an attitude of entitlement to things you can’t afford it is unlikely that you will save anything for the future.
They insist that it is better to deny yourself some ‘comforts’ now, and enjoy yourself in the future.
‘It’s too late for me to save’
While some say they are too young to save, some others believe they are too old to do so. Experts, however, say that it doesn’t matter how old you are. According to them, even if you are living just on your pension, you can still try to save some money.
If you are about to retire and you find out that you have only saved little, then it is advised that you consider delaying your retirement for a while so you can keep some money aside for the ‘lean’ years.
Culled from PUNCH
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