It’s almost holiday season. The time of year when spending can sky rocket.
Kids are home from school and want to be entertained. Parties are plentiful. People travel and visit family. And dare we mention gift giving?
If you’re not prepared, it can be a spending nightmare.
Which is why I want to talk about SAVING.
Before you get caught in a spending spiral, I want to remind you of something:
If you’re really serious about living a financially sustainable and meaningful life, you need to save money and grow your wealth.
If that’s not happening, I suggest you keep reading.
Here are seven reasons why you might not be saving enough:
1. You have no idea how much money you really need each month.When was the last time you tracked every single dollar of your spending, even for a month or two?
Tracking gives you detailed information about your habits and patterns. And that gives you CHOICE.
Choice to do things differently. Choice to spend, earn and save differently. Choice to prioritize what you want and to make sure that your most important needs get met.
But if your spending habits are fuzzy and you’re relying on guesswork, money will slip through your fingers. And you’ll have little or nothing left for savings.
2. You keep upgrading your life and neglecting your savings. This is really common. You get a raise at work, the revenue in your business increases, you get a tax refund or a financial windfall and you up your personal spending.
After all, you work hard and you deserve it!
You redecorate your home, update your wardrobe, take a spa day or go on vacation. Or all of the above.
I’m not suggesting you live like a hermit. But your spending does not have to expand to meet your income. Use the gift of greater inflow to save more and create financial freedom.
3. You’re a Money Procrastinator. You keep putting it off, convinced you’ll start saving when you start earning more.
Besides the fact that people tend to be ridiculously optimistic about these things and then keep putting it off, money needs time, patience and discipline to grow.
The miracle of compound interest teaches us that consistent, disciplined savings can grow into a healthy nest egg over time. And every year you delay your savings significantly impacts your future wealth.
4. You’re in debt. Debt is a huge drag on the growth of your wealth. Especially if you’re paying an exorbitant interest rate on credit card debt or an overdraft.
Nevertheless, even if you’re in debt you still need savings. YES!
Because life happens. You may need emergency dental treatment, to replace burst pipes or prescription glasses your toddler just broke in two (been there…), car repairs or something else. If your savings account is empty, you’ll end up swiping your credit card. And paying those high interest charges. All over again.
5. You’re an emotional spender. Does a bad day at the office or a fight with your spouse trigger a spending spree? Do you head to the shopping mall when you’re feeling stressed, angry, bored or lonely? If you’re unhappy with your weight or the way you look do you buy something to make yourself feel better? Are you compensating for scarcity that you experienced as a child by living above your means today?
If any of these sound familiar, you need to pause before you make any spending decisions.
Take a deep breath. Count slowly to ten. Pay attention to what you’re feeling and allow yourself to experience the full intensity of your emotions.
Check in with yourself and discern whether this is a purchase you really need right now.
Journaling is also a great way to get in touch with yourself, to express your emotions and to release them.
And ask yourself: Do I really, really need this thing. Right now?
It may take time and practice. And you may need the support of a therapist or a money coach who is trained and certified to work with people on the practical and emotional components of spending.
And when you’re able to take charge and control your spending you will be empowered to save and grow your wealth.
6. You’re underearning. If you have clarity about your expenses, you’ve reduced your spending to necessities and still you cannot make ends meet, you’re probably an underearner. You need to find a way to bring in more money.
You might need to find a higher paying job, ask for a raise, raise your prices, sell some things from your home or work a second job. It may require some creativity to figure it all out.
But one thing is for sure, if you want to live a life of financial stability and freedom you need to earn more than you spend. And save the rest.
7. You’ve never run the numbers. For most people under the age of 50, retirement seems like a long way off. So they don’t think about it. Or they think they’ll work until 100.
But truth be told, we tend to slow down as we age. And frequently we want to do other things, like play with our grandchildren, volunteer for meaningful causes, write a book, or take a family vacation to see the total eclipse of the sun (like my hubby).
So you need to run your numbers. You need to figure out if you’re going to need a million dollars or five million dollars in your retirement nest egg. There’s no judgement in the number.
It’s all about the lifestyle you want to live.
Owning that number and choosing your financial destination helps you set the path for your unique financial journey. You’ll probably need to course correct a few times between now and 100. But knowing where you’re going and how you’re going to get there increases the likelihood of achieving financial freedom. Sooner and smarter.
So you can stop trying to fly by the seat of your pants.
Financial freedom is the journey of a lifetime.
If you’re ready to change the way you do your money, grow your savings and build empowered wealth, sign up for my Savings Challenge. This worksheet will help you make Saving realistic, achievable and fun.
Get your worksheet here: