7 Lies We Tell Ourselves About Saving Money (Video)

Recently, I have had some interesting conversations that centered around how we talk ourselves out of saving money. Simply put, we tell ourselves little lies we make up in our head. We end up talking about how we spend money, as if we manage that, saving it is easy. Let’s face it, it’s much more fun to buy something than it is to save, but we all understand there needs to be a balance. Here are some common lies about saving money from an article I find to be very common:

1. I can only save a little bit, so it’s not worth it. Any savings adds up over time, just as spending does. For example, add up how much you have spent on little things like fast food, lattes, etc. on a system like Mint.com. Imagine if you saved half of that…it adds up when you take into account the compounding affects of a 401k. Even adding 1%-2% more in savings makes a big difference, especially if you have 15 years or more before you plan to retire.
2. I’ll START saving money when I make more money. Just remember, it’s not how much you make, it’s how much you save. I have met with numerous individuals that have larger balances in their accounts than people who make 3-5 times more. It’s about spending less than you make, and then making the most of what you save. Waiting to make more money simply delays the process, and this excuse usually results in finding other ways to spend that raise once you get it.
3. If I earned more money it would be EASIER to save. Sure, it could be easier, but only assuming that you save it and don’t spend it. Saving money is often the result of understanding what you are spending. Get a handle on your spending using a tool like Mint.com, as it can illustrate where you are spending money that you might be overlooking. It constantly surprises me in my personal spending habits.  
4. I want to be a good parent, so I need to give money to my kids now so they can have a better life. Not at all true. I know many people who had everything they could have asked for as a kid but have a poor relationship. Bottom line, love your kids (and make sure they know it) while modeling financial responsibility and you could end up with happy kids that may understand the value of a dollar. A better life is about having love in our lives, not what material possessions we have. Ok, I’m getting off my soapbox.
5. I can always get a loan if things go wrong. Danger! Creating an emergency fund is a vital portion of a financial plan. It’s boring, and meant to be. Keep it in a money market/savings account because everyone needs a ‘tomorrow bucket of money’ just in case. Personal loans? It is a difficult conversation to have with a bank, family, etc. with absolutely no guarantee of receiving it. 
6. Saving money is all about deprivation.  It’s about responsibility, not deprivation. While I do not recommend ‘depriving’ yourself or your family, I do recommend re-evaluating what we perceive that we need. Depriving means we do not have what we need…but do we really need that latte, pair of shoes for that outfit or new DVD?
7. Saving money means cutting out all the small fun stuff. Not at all. Just buy less of it and treat yourself every once in a while. I find that I appreciate “treats” more when I do not purchase them as often…or find that I don’t really need/want it in the first place.

httpv://www.youtube.com/watch?v=F6UGqfUp-4M