Too much month at the end of your money? You’re not alone! In helping people with their money concerns, it wouldn’t take one much time to come to the conclusion that most people want to invest/save more. Most feel that there just isn’t enough money within their current monthly budgets to survive today and save for tomorrow.
Why do people neglect investing in their future?
The decision to save money is both a personal and financial choice. Most people repeatedly find themselves stuck between what they want to do, such as saving on a regular basis, and what they think they can afford to do. Thus, they’re stuck between a rock and a hard place. Saving money can feel like a luxury for those who don’t feel that they can afford to save regularly - but the truth is that everyone can afford to save, even if it’s only a little bit!
The 4 Top Reasons why most neglect savings/investing:
Too many expenses.
Most of us feel like there isn’t any “extra” money in our current household budgets to save and invest any more than we already do after all our expenses have been paid. The reason being that most of us waste money every month by paying for things we don’t really need, or we pay more than we should for things we really do need. So the solution would be to eliminate these unnecessary expenses from our current household budgets and look for more cost-effective ways to fulfill our daily needs.
Not prioritising to save money.
Some people tend to think in the lines of: "I'm young, I'll worry about it later". Thinking like this leads to procrastination. Every day you postpone investing will cost you money in the end. Thus, draw up a short and clear savings plan, including; how much you want to save every month, and how much you’d like to have after a few years. As a South African citizen, you can also benefit from applying for a Tax-Free Savings Account, a great place to start!
Too much debt.
Perhaps the main and most frequent reason is too much debt. Most people that seek help with their finances in their later years have probably been battling debt for decades without making any headway. Debt can be an unrelenting cycle throughout life if not managed effectively. So, find ways to reduce your debts and even your taxes, and then put all that money into long-term savings and investments. This may sound confusing, or easier said than done, but it’s actually easier than one might think. You may even consider consolidating your debt to ease your monthly cash flow. Also, consider closing unnecessary retail accounts and worthless lines of credit. A great rule of thumb to live by is - whatever item or service you finance, should last longer than the life of the loan.
Don't want to lose money.
This is not to suggest that no one has ever lost money in the financial markets. Of course, it's possible to lose a lot of money in a short amount of time. But – the plus side is that one can experience significant gains if well educated. There are many platforms out there that can get you on the right track, you can also discuss the latest tools and investment/savings plans with your local financial advisor. Thus, the key is in converting “wasted” Rands into regular monthly savings/investing. The earlier you start, the better off you'll be, thanks to the value of compounding returns.
The Key Takeaway
Delve into your budget and find the money, then reposition that money into smart and safe investment/savings accounts. Fincheck believes it really is that simple and leaves you with this thought...
"Don't tell me where your priorities are. Show me where you spend your money and I'll tell you what they are.” – James W. Frick
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