Money is commonly defined by the functions attached to any good or token that functions in trade as a medium of exchange, store of value, and unit of account. And since we will be discussing women and general money issues, it will be wise to say that “you shouldn’t be yourself’s financial enemy.
We buy a little something more expensive than we can afford. We know we should save for retirement, but haven’t contributed towards anything . We let inertia take hold and keep putting off getting that will drawn up. And then, we rationalize these actions to ourselves.
“Well, it wasn’t that expensive,” we’ll say. Or, “Retirement is a long ways off. I have time.”
Financial advisors see this time and again. In talking with people about their money, they find one of the biggest obstacles to making financial progress is actually the individual’s own money excuses.
People often make money excuses because they aren’t ready to change their behavior to reach their financial goals. The most successful people are those that recognize their shortcomings and take action to fix them.
If you have new financial resolutions or are dreaming of even bigger things, then to reach your goals, you have to banish your money excuses. As long as someone is making excuses for their financial situation, nothing will change for the better. The only way to improve your finances is to face your challenges head on.
- Budgeting: “Unexpected expenses always throw off people’s budget”
If you tried following a budget in the past and fell off, you might have found yourself thinking this. But, think about it — if you always have unexpected expenses, then they’re not really unexpected. I encourage people to build a buffer into their budgets for exactly this reason. It seems that without fail every month has something — birthday gifts, car repairs, travel.
Don’t budget so closely down to the last penny that your budget is “thrown off” for the various unforeseen expenses that occur each month. Set aside a few thousands each month as a cushion. Follow these tips for creating a budget.
- Saving: “I can’t save any money right now.”
Nine times out of ten this simply isn’t true,”. If you have a regular income, you should definitely save some portion first, ahead of your other spending. If you’re that one in ten that actually does not have room in your budget to save, then you need to cut your expenses. Move to a cheaper home, start bringing your lunch to work, trade your car in for something less costly. Saving may mean sacrificing a bit today, but you’ll thank yourself later.
Choose and set up a savings account, what percentage of your income you should put toward savings, and then automatically send a portion of your paycheck toward it every month (or do a regular automatic transfer from checking to savings). If it really feels like you can’t, just start with 1000 a month — 500 a week — and increase it from there.
2. Spending: Groceries are expensive. It’s cheaper just to go out to eat or buy fast food.
Don’t be swayed by the idea that fast food is cheap. The average Nigerkan spends almost 35,000 a year on eating out at lunchtime — on average, a 2,000 lunch twice a week. Unless you’re a gourmet chef, it’s generally cheaper to buy groceries and cook — and it’s healthier, which can also save you in health costs. Make a habit of going to the grocery store. Cook evening meals a week in advance. Bring your lunch to work. If money is tight, buy inexpensive staples and get creative.
Here are a myriad other ideas on keeping your costs low, and 12 money tips
- Debt: “I’ll always be in debt, so what’s the use in trying to pay it down?”
Debt, even if it was a wise investment, is a drag to pay off. For that reason, most people don’t really approach it with a lot of enthusiasm. But, you shouldn’t let it get you down. Coming up with a strategy to pay down debt is far easier than people realize, It might hurt a little, but it’s important to remember that it’s temporary. You’ll probably have to change your lifestyle and cut back on spending, but watching your debt shrink and eventually disappear is one of the most empowering feelings a person can have.
2.Retirement: “I’ll save for retirement later, when I make more money.”
Income fluctuates over the course of our lives. Rarely, if ever, does it go up in a straight line. Putting off retirement until you make more can be a disastrous decision. It’s far better to create a habit of consistently saving 10% (or 20%) toward your retirement account. Using a percentage means you will always be saving in line with what you can afford, rather than doing nothing for a while and then frantically trying to catch up later.
The biggest money mistakes retirees make are:
- Insurance: “Finding insurance is too hard. I don’t know how much to get, or who to trust.”
This feeling is often valid, but it doesn’t change the fact that certain types of insurance are essential. Working with an objective advisor is a great way to find the coverage you need without being oversold or taken advantage of. Don’t put it off until it’s too late.
2. Credit: Keeping a credit card balance helps keep my credit score high.
Credit scores are calculated based on payment history, credit utilization (the percentage of your available credit you are using), length of credit history, types of credit used and how much of it is new credit. Keeping a balance on your credit card has nothing to do with your score — and if anything is more likely to be a negative.
Pay off your credit card balance every month. The only people who should have a balance are those who can’t afford to pay it in one go — and if that’s you, you should have set up a budget that keeps you from contributing more to your debt and is helping you pay it down every month.
3. Earning: “I can’t ask for a raise.
It never hurts to ask. In fact, in my experience, almost everyone who asks gets a raise. In cases where that isn’t the outcome, I encourage people to start looking for a new job. A boss who refuses to fairly compensate and reward you for your work, isn’t a boss worth having.
If you decide you’d like to get a raise, have a plan for it. Tips are to ask for a raise or negotiate your salary at a new job. After that,
- Investing: “Investing is too complicated/scary/confusing.”
It’s true — when starting out, investing can be a little intimidating. But you know what’s even scarier? Missing out on long-term gains in the market. By letting this little excuse keep you from investing, you could be losing out on thousands of dollars this year, and hundreds of thousands down the road. For most people, the best option is simply to buy a mix of index funds. A target date retirement fund is also a very good, simple option. Investing novices can get help from companies that provide risk tolerance questionnaires with personalized fund recommendations. It really doesn’t get easier than that.
2: Estate planning: “I don’t own much and I don’t have kids. So I don’t really need a will.”
This could be true for you, but there could be other estate planning documents you need. Everyone needs to designate beneficiaries on accounts, and to have a health care directive and power of attorney. These forms are often free — so you can take a simple approach to save on legal fees. The important thing is to get it done. And to make sure your family knows where to find them if need be.
Call up all your financial providers to ensure you have a beneficiary on each account. If you do need a will and have been putting it off, work with a local estate planning attorney and get a living will form for your state here.
I know some women might say that they have no right to do this but it is not true. You have to start planning if not for yourself, for the sake of your children. Your husband won’t always have everything covered. And not to forget, you are his help meet too plus this article is applicable to everyone around the web.