Nice smartphone you’ve got there. But how’s your savings?
If the question startled you and made you think for a second, you might be one of the people who have more clothes in their wardrobe than dollars in their savings account. You blame the catchy advertisements and enticing displays of shopping malls. You blame payday loans. You blame credit card companies. You blame your friends. You blame your low monthly income. You blame your education.
You blame the world for not having abundant savings – but never your own mistakes.
Stop making excuses. The excuses you kept saying all these years may have hindered you from escaping your paycheck to paycheck spiral today, and probably will affect you in the years to come.
“I don’t know how to save”
Unfortunately, “Adulthood 101” aren’t taught in schools so you tend to get lost in the real world. You’re not informed of the basics of investment, banking, loans, and taxation, but you sure know Einstein’s Theory of Relativity. With this, educating yourself is the key.
Saving is when you put money away in complete safety and get it all back plus the interest. Investing is when you risk losing some cash and/or interest for the chance of making your money grow quicker. Ideally, you should start saving as soon as you start earning, and take baby steps to put away money for emergencies.
“I don’t know where to save”
Next question is, where will you put your savings? You should put it in right accounts so your money could grow and gain larger returns over time. Start with a savings account, offered by banks and credit unions, which usually have lower interest. High-yield bank accounts, on the other hand, is a type of savings account with the larger initial deposit but with higher interest rate than standard savings accounts.
“I don’t have enough money to save”
With smart budgeting skills, you’ll have. You might be making just enough money to cover basic needs, or you might be carrying high-interest debts. But extra savings, no matter how big or small, can be reaped out of your budget. Maybe you’re just not making your savings a priority.
My aunt used to tell us: save then spend. You can always start with small amounts, and increase the number you put in your savings as your income and your financial situation improves.
“I’ll start saving later”
Pledging to save later is another big financial mistake.
Procrastination is expensive since time is a very valuable asset. The cash in your savings account increases over time since you’re dealing with compound interest, or the addition of interest to the original sum of a deposit. The earlier you start saving, the more your older self will thank you.
“Life is short, so why save?”
When “YOLO” is your motto in life, you feel entitled to the best things in life. You live in the moment. You don’t care about what tomorrow may bring. Such mindset, or perhaps the wrong interpretation of the idea, is one of the reasons why people choose not to save money.
There’s nothing wrong with having fun and getting nice things and experiences but you can’t just sell yourself short when it comes to financial security. Make a list of your current financial priorities, allocate your funds accordingly, and watch your spending.
You have no power over everything.
You can buy the best fire fighting equipment for your home but they have no use when flood or earthquake hit your abode. You may have all the knowledge and skills to keep your job, but you can only do so little when the company shuts down, leaving even the best people unemployed. You can control the steering wheel of your car but you have no control over the mind of the drunk truck driver behind you.
During these unfortunate and unanticipated situations, you need emergency funds to keep you going.
“But… but I need this”
Since when did car accessories become a need?
One of the biggest disabilities of humans is not being able to say no. You can’t say no to the temptations of the advertising industry. You can’t say no to instant gratifications. We buy things we don’t need. We need things we can’t buy.
Every time you feel like you have to buy something, ask yourself: Is it urgently needed? You’ll get the best out of life when you learn to delay gratification and prioritize your savings.
Author Bio: Ina Salva Cruz is one of the daytime writers for Speedy Money Payday Loans, an Australian-based business, providing short-term borrowing solutions. Like other young adults, she’s focused on getting a head start on her finances and she loves to write about wealth-building tips for millennials.