Remember the kid in elementary school who always came up with lame excuses for not bringing in homework? You probably even laughed at some of them, didn’t you?
Fast forward to adult life and your retirement savings. You know you should be putting as much money as you can afford into an investment account. But are you? Or are you just as guilty as the kid in your grade school class when it comes to finding excuses for not investing? If you’re using excuses like the ones below for not saving more, you may need to rethink your strategy.
The “No Extra Money” Excuse
You could save a chunk of change by forgoing that morning coffee and danish on your way to work.
You say your paycheck is stretched to its limit, but is it really? Think about the things you spend your money on each month. You could save a chunk of change by forgoing that morning coffee and danish on your way to work. How about eating out one less time each month or renting a DVD instead of going to the movie theater? Small changes in your spending habits can mean more money in your pocket with very little sacrifice.
Review your budget for places to save. Cutting back on expenses is one of the easiest ways to find extra cash to add to an investment account.
The “Know Nothing” Excuse
Sure, investing can be complicated, but you don’t have to go it alone. Your financial professional can help you design an investment plan that will fit your goals and risk tolerance. If you contribute to a 401(k) or other retirement plan at work, you may be able to take advantage of the investor education provided by your employer. You can also improve your knowledge of investing by reading financial publications, such as newspapers and magazines. Your local bookstore is likely to offer a section on finances where you’ll find a variety of reference books on investment topics. You might also investigate financial sites on the Internet, but be cautious. Make sure the source is reputable, and don’t act on anything you read without first consulting your financial professional.
The “I Want It Now” Excuse
If the thought of having your money tied up is stopping you from investing more, consider this. Many investments offer you liquidity — the ability to quickly turn your investment into cash. Treasury bills, money market funds,1 and other short-term vehicles can give you fast access to your funds, although earnings from these investments may not always keep pace with inflation. Investing in stocks or stock mutual funds2 allows you to take advantage of the potential for earning higher returns. If you find you need the money, you can always sell your shares or borrow against the assets, as long as you have an account with a brokerage firm.
The sooner you start, the more money you’ll be able to accumulate, but investing for even a short period of time is better than not investing at all.
The “It’s Too Late, Baby” Excuse
Toss this excuse in the trash compactor — it’s never too late to begin investing for your future financial security. Whether you have five years until retirement or 35 years, increasing the amount you’re saving will help you reach your goals. Of course, the sooner you start, the more money you’ll be able to accumulate, but investing for even a short period of time is better than not investing at all.
Remember, it’s your future. So, get started now — before you and that pooch come up with another lame excuse for not investing!
1 An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency. Although the fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the fund.
2 Mutual funds are sold by prospectus, which includes information on charges, expenses, and risks. To receive a current prospectus, please contact your registered representative. You should read the prospectus carefully before investing.
Article sourced from CUNA Mutual Group. The Financial Resource Center is an educational resource of DST Retirement Solutions, LLC brought to you by CUNA Mutual Group. The content in this resource is intended to be educational only and is not to be considered advice.