11 Money Excuses to Stop Making in 2014

Alexa von Tobel

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Putting money away for retirement conjures up a whole range of excuses, and believe me, I’ve heard them all.

What are the most common things we tell ourselves to avoid saving for retirement?

Oh, where to begin!

Excuse 1: I can’t afford it.

Nearly one in four people say they don’t have money to contribute to retirement after all the bills are paid. It might feel that way sometimes, but if we can find the $50 to go out to dinner every Tuesday night, we can find $200 a month to put in a retirement account. Make this happen, even if you have to do it one dollar at a time over the course of the month.

And if you think putting away $50 a week won’t make a difference, consider this: Contribute just $200 a month for thirty years, and if your money grows on average 8% a year, your total contributions of $72,000 will grow to almost $300,000 if put away for 30 years. When you think about it that way, skipping that regular Tuesday dinner doesn’t seem so bad, does it?

Excuse 2: I’m young. There’s plenty of time to save for retirement later.

This is one of the most seductive retirement lies. For a good long while, it is true that
retirement is a ways off. (Even if you’re 55, it’s still at least ten years away.) But the longer you put off saving for retirement, the less interest you’ll earn and the more difficult it will be for you to save.

An example: Alex and Jordan both put just over $90,000 in their retirement accounts over the years, but Alex began saving ($2,000 per year) at age 22, while Jordan began saving (about $3,500 per year) 20 years later at age 42. Even though they
both put in the same total amount, Alex will have over twice as much money at
retirement as Jordan will when they reach age sixty-seven (assumes a 6% annual
rate of return). That’s because her money had more time to grow, so it was able to
make more off of itself than Jordan’s.*

Seriously, you have two people who put the same dollar amount into their retirement funds. The one who started twenty years later contributed the same amount, but ended up with less than half as much.

RELATED: The Secret of Retirement Savings: You Can’t Make Up for Lost Time

As someone who cares about making my money work for me, this speaks volumes. It turns out that one of the smartest things you can do is simply to get time on your side. This is how you shortcut the hard work—by taking advantage of the power of compounding interest and the fact that you will only have an increasing number of financial obligations pulling at your purse strings as the years go by.

So, this is not something you can keep putting off. This is something to tackle today. The time is now.

Excuse 3: When I get married someday, I won’t have to worry about money.

I bet all the married people reading this are having a good laugh right now. Marriage does not automatically make your financial life easier. The effect of marriage on your finances depends on a host of factors: Do you both work? Do you both make enough to support yourselves? If one or both of you got laid off, could you still afford your rent or mortgage? Are you honest with each other about your spending? Do you agree on your financial goals? Will you have children? If so, do you make enough that one of you can stay home with them? Bottom line: This is an outrageous excuse, and now I am drinking wine.

RELATED: 5 Tips for Couples Tackling the Money Talk

  • http://thebrokeandbeautifullife.com/ Stefanie @ brokeandbeau

    Are their really still people out there counting on their future spouse to support them financially? I’m glad I learned the value of investing and saving early on. My income is pitiful, but the money I have is working hard for me.

  • Just Jill

    I drink wine when I think about finances too ;)

  • Orly

    Thank you for the article, but where’s the next step? I’m looking for the “Don’t Have a Clue About How to Open a Retirement Account? Here’s How” type of article. It’s nice to encourage us to start saving but it would be great to follow up with the article or websites that could actually get us started. Thanks.

    • shadrack

      Hi Orly, my name is shadrack Badia,am an Independent Financial Advisor, i can give you pointers on where to and when to get started. shadrack.badia@gmail.com

  • Kitsu

    I really empathized with excuse #6. My friend had a structured settlement from when she was a baby, and ended up squandering 100,000 in court-won money over five years. While some of it was stolen by an ex, the bulk of it went towards “play” purchases, like clothes she did NOT need in the slightest, a trip upstate and cosmetic procedures that will severely hinder her future job outlook! That money could have been the way to fund her future successes- but instead it’s all gone, and she’ll never even use the items she bought.