A phrase that perfectly sums up what it’s like to be alive today is “keeping a lot of balls in the air.” Personal finance is just one ball we’re all constantly juggling—amongst others like work, family, friends, pets, basic needs, living environment, recreation and self-development. Some days it feels like a Herculean task to just stay afloat; to take care of what needs to be done, let alone find time to do what you enjoy.
There’s a lot competing for your limited attention. It’s easy to let personal finance fall by the wayside, categorized as a project for another day when you have more time and energy. But the problem is that cultivating a healthy financial life requires consistent attention.
Start by eliminating these five common excuses that can hold you back you from taking control of your money management and thriving financially.
“I’m No Good at Sticking to a Budget.”
This excuse implies there are some people who are “good” at budgeting and some people who’ll never have a knack for it. While people do bring different personality traits and penchants for organization into the personal finance mix, anyone can create and stick to a budget. How? Make it more interesting and engaging for you based on what motivates you.
If you try to handle your budget the traditional way, it may not click for you. But there are more options than ever before available. Did you know you can create and maintain your budget via a helpful smartphone app these days?
Instead of putting yourself down for having been less-than-amazing at budgeting in the past, find a way to budget that makes sense to you. Spice up your approach to personal finance and you’ll be that much likelier to stick with it.
“I Don’t Make Enough Money to Save.”
Saving is certainly easier when you have plenty of disposable income to go around. But there’s some degree of saving and budgeting possible at nearly every income level—think in proportions rather than lump sums when it comes to setting your expectations.
Even with limited income, it’s nearly always possible to take important measures like setting aside 10 percent of your paycheck for emergency savings. Saving or paying off debt—even at a slow and steady rate—will help you continue to work toward financial stability rather than living paycheck to paycheck.
Try to work with what you have rather than telling yourself you don’t have enough to save. Learn about creative ways to save extra money each week. For instance, debt expert and Freedom Debt Relief co-founder Andrew Housser advises those trying to save cut back on eating out, cancel underutilized entertainment subscriptions, skip pricey coffee, sell unused hobby supplies, etc. These “small” actions will free up additional money for debt repayment and saving.
“I Can Pay My Debt Off Later.”
The funny thing about debt is that it just keeps growing. What’s $100 now might be $150 in a few months. Any unpaid balance accumulating interest will just keep growing; then that increased amount will accumulate interest, and so on.
Paying off your debt now will save you money in the long run. Here’s a basic example from The Simple Dollar: Someone carrying a $5,000 balance on their credit card with a 21 percent interest rate spends more than $50 each month in interest charges. That’s over $600 a year going to interest alone rather than something impactful.
“I’ll Focus on Retirement Later.”
It’s easy to procrastinate on saving for retirement—especially when it’s years down the road. But doing so means you’ll miss out on the power of compound interest. Basically, the interest you make on your initial investment then garners interest, snowballing your account into collecting more and more interest the longer your funds are invested.
Starting earlier means you’ll have a lot more in your account come retirement time, thanks to the power of compounding interest.
“Credit Cards Are My Safety Net.”
If your plan for handling an unexpected expense, like an ER bill or a hefty auto repair, is putting it on your credit card, you’re playing with fire. To avoid getting burned by debt, build up an emergency fund month by month, squirrelling away some of each paycheck until you have at least a couple months’ worth of living expenses ready to go.