While completing your college degree, you might have imagined yourself graduating, securing a fabulous job and getting an envy-worthy apartment in the city. But life doesn’t always go according to plan. It’s much harder to earn a living nowadays. Even with a good job and hard work, there’s isn’t always cash flow for bills.
Sure, life can be tough at times, and many people experience financial hardship. But sometimes, we create our own difficulties. If you develop a habit of making excuses for why your personal finances are in the toilet, your situation may never improve.
Here’s a look at four of the worst financial excuses you’re making, and ways to change your mindset.
1. “I don’t earn enough to save”
Understandably, many people don’t have a lot of disposable income, and saving is especially challenging for young adults in the early stages of their career. But just because saving doesn’t come easy doesn’t mean you should give up on the idea of building a rainy day fund. Emergencies will happen — it’s not a question of if, but rather when. If you tell yourself you don’t earn enough money to save, one emergency might force you into credit card debt.
Money experts recommend saving 10% of each paycheck. This is a guideline, not a hard or fast rule. So, you have to do what’s best for your personal finances. Even if you can only save $25 from each paycheck, this amount is better than nothing. If you can save $25 a week, that’s $100 a month or $1,200 a year. Another option is asking your bank about automatic savings programs. For example, some banks will deposit one dollar into your savings account for each debit card transaction you make. It’s a simple way to save, and in most cases, you won’t miss the money.
2. “I have my whole life to worrying about retirement”
If you’re in your early or late 20s, you may feel you have the next 30 or 40 years to worry about saving money for retirement. However, the earlier you start saving, the more money you’ll have later in life. Whether you’re saving a liquid fund or opening a 401(k), don’t wait until the absolute last minute to start planning. Delaying retirement planning for five or ten years can be the difference between retiring early or working additional years. Speak with your bank about retirement savings options and enroll in your employer’s 401(k) program as soon as you’re eligible.
3. “Everyone has debt”
In the United States, the average household has about $15,000 of credit card debt, according to a 2014 survey published by NerdWallet. But just because many households carry a huge debt balance doesn’t mean you have to. You can be the exception. No good comes from too much credit card debt. Debt can lower your credit score making it difficult to qualify for mortgages and auto loans, plus costly credit card payments can strain your finances. Credit cards are a useful tool when there’s an emergency or if you need to establish credit, but they’re not an extension of your income. Only use credit cards when you can afford to pay off your balance in full.
4. “This is all I know”
If you’re bad with money and credit, you might say, “This is all I know”. Maybe your parents didn’t teach you good money management skills, and perhaps they made similar mistakes. Nobody is born knowing how to manage their money and credit — it’s something we learn over time. So, even if you’ve made mistakes, you can educate yourself and make better decisions in the future. If you learn how to manage money, it’ll be easier to live by a budget. With a good budget, you’ll be able to pay your bills, save money, and you’re less likely to stress about finances since you’re no longer overspending.
See also: How to Save for Retirement
You have more control over your personal finances than you realize. But to get a handle on your credit, debt and money, you have to stop making excuses and take action.