6 Signs That You’re Probably Not Saving Enough Money, Even If You Think You Are
It’s time to think about the wrong things you’ve been doing.
Earning a lot of money doesn’t necessarily make you financially free. After all, how much your income is doesn’t matter, but net worth is the indicator that matters when you want to measure true financial wealth.
No matter what you see in your paycheck or bank account, you still need to save and invest your money, as well as solve your debt problems, if you want to build financial wealth.
These are the red flags of your financial situation:
You barely pay your bills on time
Not being able to pay your rent is the number one sign that you’re not saving enough money.
Living paycheck to paycheck makes it almost impossible to accumulate significant savings.
You have two smart alternatives: making more money or spending less. If you take the first route, consider discussing steps to negotiate a salary increase, or starting a side hustle on the internet.
If you want to spend less, consider having a quiet life where you need less money to live. You may also want to think about reducing your higher costs, such as rent, and transportation.
You promise yourself that you’ll save more when you start earning more money
“When I earn more” is not an action date. Someday I’ll have $100K in reserve is not a day on the calendar. This is one of the most common lies about money that people tell themselves. The way you handle $100, you’ll probably handle $10,000 or $100K.
You have to change your attitudes, behaviors, and financial habits. It’s not about taking more money. It’s about taking the money you have seriously.
Don’t wait until the new year, after graduation, for your birthday to start saving money. Start today. Start now. Even if it’s $2. The important thing is to start.
Not having an escape fund
Establishing a nest egg is one of the most important steps you can take with your money and should only be stopped if you have credit card debt. If you haven’t prioritized your rainy day fund, likely, you’re not saving enough.
You haven’t started saving for retirement yet
Saving money for retirement can’t wait, even if you have to wait another 40 years to leave the traditional corporate world.
Saving for retirement can take a few different forms, no matter how you choose to save, the best thing to do is to start early. Time is man’s greatest enemy. It’s better to start with it than not at all.
You haven’t started investing yet
Investing can be considered the most effective way to start building wealth, and the sooner you start, the better, thanks to the power of compound interest. If you feel you don’t have the money to invest, then you’re not saving enough.
Savings for retirement are one way to invest, but if you want to get more involved, there are other avenues to explore. Start by researching low-cost index funds.
You don’t control your expenses
Most of us know how much money goes into our bank accounts every month, but nobody knows how much goes out. There’s probably more money going out than you think and there are probably things we should cut.
Once you’ve figured out which expenses you can cut, redirect the money from those expenses into a retirement account, where they can accumulate and grow over time.
Finishing up.
If you have debts, work to eliminate them immediately. Save to travel. Save to live without financial worries.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.