You don’t make excuses. Your the type of person that reads personal finance blogs. You get it. You understand your priorities and the value of your financial habits. However, you also probably know people that aren’t like you. Friends, family members, truly the vast majority of people that I know have come up with excuses for not tending to their personal finances.
I am here to debunk those excuses. Feel free to use this as fodder in your next conversation with cousin Frank who works for minimum wage and drives a Lexus.
1. People Who Invest Are Scummy – We’ve all seen movies like Wall Street and The Wolf of Wall Street. These movies would have you believe that everything surrounding the stock market is a little bit grimy. Of COURSE there are immoral, grimy situations that surround the stock market every day, but the general principle of buying a small piece of a company that is creating value is a far cry from the tricks that some of the players on Wall Street play. I used to think the same dirty thoughts about real estate investing, but I took the time to look into it further and realized that there are ways to play that game without sacrificing your principles as well. If you are creating value for people or entities and they are paying you for that value, I don’t see a problem.
2. I’m Not Smart Enough to Invest – Yes, you are. Don’t worry if you are not smart enough to day trade – few are. For long term investing strategies, all you need to do is put in the time. Listen to financial podcasts on your way to work. Better yet, spend an afternoon reading Jim Collins’ Stock Series. Once you set yourself up with an index fund or two and have money transferred from your bank account automatically every month or every couple of weeks, you are set! After that, you forget about the investments, check back 20 years later and see how much they’ve grown!
3. People Who Work on Saving Money are Crazy – The only episode of Extreme Cheapskates I have ever watched featured a lady who only owned one lightbulb and would take it around with her to whatever room she was in and screw it in. She wanted to avoid the potential for high electricity bills if someone left more than one light on at a time. That is CRAZY. There are people saving 40%, 50%, even up to 80% of their take home pay without resorting to this nonsense. Frugal people aren’t required to clip coupons. If you focus on the big stuff: food, shelter, clothing, and transportation, you can cut your spending without much effort and without becoming a social pariah. As for your entertainment budget, you can get creative and have a ton of fun with friends and family without breaking the bank (see the majority of my previous posts).
4. I Don’t Have Enough Time to Spend on My Finances – This excuse is not exclusive to personal finance. People “don’t have time” to exercise, to find a better job, to network, and to work on their finances, to name just a few. This is bunk. Unless you can tell me that you haven’t seen a movie, TV show, or spent ANY time entertaining yourself in the past year, you can find time (if that is the case, you should first find time to re-evaluate your life as a whole).
5. I Have Too Much Debt/There’s No Hope for Me – You know how you eat an elephant? One bite at a time. I have heard too many people give up on their finances because their situation is too dire. However, just do a quick Google Search for “debt blog” and you will read countless stories of people who have escaped MASSIVE amounts of debt. This excuse is a mental roadblock, not logic-based.
6. I Want to Spend Money While I Am Young Enough to Enjoy It – This one makes me angrier than any other. The problem here is the “enjoy it” part. You haven’t spent the time figuring out your priorities, so you don’t know HOW you enjoy money. You have never set money parameters on yourself, so you don’t know just how creative you can be, coming up with ways to enjoy life and spend less money. Gucci won’t make you happy and you don’t need to make it rain to gain true friends.
7. I Might Lose Money In the Stock Market – Yes, the stock market is volatile. However, over long periods of time, it has always gone up. The vast majority of experts will tell you that the upward trend will continue (again, long term). And guess what. If you DON’T invest in some way, you are guaranteed to lose money due to inflation. Don’t focus on one day, one month, or even one year. In the long run, the idea of risk starts to fade and volatility takes it’s place. Over 20 years, you just have to have to strength not to panic when the market takes a dip and you will be fine.
8. I’ll Be Earning More in the Future, So I’ll Save Then – Readers of this blog are smart. You probably are fully aware of the power of compound interest. Saving a little bit now is worth saving a WHOLE LOT later. However, seeing graphs of compound interest never gets old to me. Charts like these will always be amazing to me.
9. I Can’t Afford Saving and Investing Right Now – You can’t afford NOT to save and invest right now. Start small. Start by saving 1% of your paycheck and slowly ramp that up. You won’t even notice it’s missing if you take it out of your bank account and put it in your 401k or other vehicle right when you get paid. Starting this habit is CRUCIAL to future frugality and the power of compound interest is profound. A small amount today will become a HUGE amount 30 years from now.
10. I Don’t Know Where to Start – Start by reading Mr. Money Mustache, listening to the Stacking Benjamins podcast, and reading Jim Collins’ Stock Series. Start implementing the strategies there and if you screw up a little, learn from your mistakes and move forward. That’s pretty much all you need to get started.
What excuses have you heard? Leave them in the comments!
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