Setting money aside, whether for retirement or just for savings, is not easy. In fact, many of us started working the earliest we could, but still don’t have anything set aside as a safety net or for the future. But why is setting money aside so difficult?
You could be too afraid of looking at your spending
We’ve all been there. When you know that your spending is out of control, the last thing you want to do it keep an eye on it. After all, “out of sight, out of mind”, right? Not only can this line of thought make it even more difficult to manage your spending, but it could potentially completely decimate your credit score. So keep an eye on your spending, even if you’re afraid to see the aftermath of your spending habits.
Change in lifestyle
The older you get, the more likely you are to have a job with an increased income. Unfortunately, this also means you’re more likely to spend more while making excuses for it — like getting a pair of shoes you’d been eyeing and telling yourself they’d make you look more professional at work (even though you already have a perfectly good pair). It could also mean getting yourself a nicer apartment, going out with friends more, or getting yourself a new car. And while getting yourself these new things isn’t a bad thing in and of itself, it can become a problem if you didn’t budget your money appropriately.
You’re not thinking about retirement
The younger you are, the more difficult it is to really care about the future. Our current environment is so fast-paced that we’re always looking for things that bring us instant gratification. But think of it this way: do you really want to be working for the rest of your life? If the answer is no, then it’s time to start thinking about setting money aside so that you can enjoy a stress-free retirement.
Insufficient Income
Setting money aside is even more difficult for those living paycheque to paycheque. If this is the case for you, then consider taking small steps towards saving money — like revisiting your expenses and determining which you can cut out or lower. This will allow you to set aside some leftover money and practice smart financial habits.
You don’t know where to start
Planning your finances can be a daunting task, especially if you’ve never had any experience with creating a budget. But don’t worry — you’ll find that creating a budget is super simple, and there are many tools online that can help you make the best one. It all boils down to calculating your monthly net income, your monthly expenses (fixed and variable), accounting for unexpected expenses, subtracting your expenses from your net income, and setting goals for what’s left over (like savings!) And if you find it difficult to set money aside instead of spending it, then you can consider automating your banking. This means opening up a savings account and setting up a percentage of your paycheques to directly deposit into your new account.
Whether you feel like your finances are slipping out of your control or like you’re drowning in credit card debt, seek help as early as possible. A licensed insolvency trustee will use all of his skills and knowledge to help you through your difficult financial times and will ensure that you have all of the tools needed to lead the life you want to live.
