I made some dumb financial mistakes in my 20s such as defaulting on my student loans, but it all started with not saving money. This was the catalyst for all my eventual money mistakes.
I want to share the excuses I made for not saving money in hopes of encouraging you to start saving money no matter what age you are. It is never too late.
5 excuses I made for not saving money
1. (I’m still young) I have plenty of time to save
When I was in my early 20s, fresh out of school, and making a decent salary, the last priority on my list was saving. Age was not just a number, it was a lifestyle. The thought of even hitting 30 was terrifying. That age felt old. I told myself I had plenty of time to catch up when I made the eventual big salary when I hit the big 3-0.
So with that mindset, what did I do? I did exactly what a colleague told me, “I’m still young, I’ll save later“.
I scraped by paycheck to paycheck and despite a generous 401k match at the company I joined as my first job out of school, I never contributed. Not a single penny. In fact, I did not contribute to any 401k or any other retirement account until I was around 28. Yup, I missed a good 5+ years of contributing to any retirement account and the free 401k company match.
You think defaulting on my student loans was bad, this was a major money moron moment.
2. I want immediate gratification
I used this excuse even after I hit 30. I heard from one of the many personal finance podcasts I listen to on a daily basis that maturity is that of being able to delay gratification.
That point really hit me because it is so true. Do I really need those designer shoes (I’m a dude, but yes I like designer shoes) right now? Do I really need that Panasonic Plasma TV (yea, dating myself, but this was so cool back in 2005). When I was in my 20s and even into my early 30s, my answer would have been, yup absolutely, gimme now.
This excuse ultimately cost me because I was living paycheck to paycheck despite a good salary.
3. I work hard for my money so I deserve to spend it
I had a sense of entitlement. The more money I made, the more I felt entitled to spend the money I worked so hard to earn at my job. You know that lifestyle creep.
If you are doing all the right things financially, then absolutely you should spend the money you earn. However, if you are barely scraping by or you have credit card debt, yet you still use this excuse, then you need to shift that financial mindset. You will end up like me scraping by every paycheck and your debt dragging along as you see your financial freedom fade away.
4. I don’t know where or how to start
This one takes me back because this is a major reason why I did not bother saving.
I wish my Big 10 education actually educating me on financial responsibility.
I wish I was smarter in my 20s about not being afraid to ask what a retirement account is. What the heck is a 401k. Why should I save. Every company I worked for had an HR department that offered help.
I wish I had seen a post like this or had the proactive mentality to seek this information out.
Woulda shoulda coulda.
The ideas of retirement, saving, and having money deducted from my paycheck that I could have used on TVs, clothes, car, and just “things” was so far from my money moron brain that I basically pushed those thoughts aside for years.
In this day and age, there is so much information that you can get in literally a second that there is no more excuse of “I didn’t know”.
Please, please, please do not be hesitant or even embarrassed to seek out financial advice even if it were to get you grounded on the basics.
It has literally cost me hundreds of thousands of dollars in retirement savings by using this excuse.
5. I don’t make enough
I think this is an excuse that many of us use regardless of how much we make. I strongly believe whether you are making 6 figures or minimum wage that there is a very small portion you can set aside every paycheck. That amount might not even be 1% of your paycheck, but that is fine. Start somewhere and do not let that amount let you think that it is insignificant. Saving something is better than nothing.
What got me out of this paycheck to paycheck mindset was to focus on my side hustles to make extra income and to keep a very simple monthly budget. I spend less than a minute per month to update my monthly budget.