3 Excuses Keeping You from Saving (and How to Kill Them)

If you're behind on saving, don't let common excuses keep you poor. Laura covers three reasons why you may not be saving for retirement and how to overcome them, no matter how much or little money you have.

Laura Adams, MBA
8-minute read
Episode #554

Even though most Americans know they should be saving a significant portion of their income for the future, report after report shows that they aren’t. According to a recent survey from Bankrate.com, 19% of respondents said they save nothing for retirement, and 21% indicated saving 5% or less of what they earn.

The average worker needs to save a minimum of 10% to 15% over multiple decades in order to accumulate enough money to retire comfortably. However, only 16% of the Bankrate survey respondents said they save that much.

We’re all at different stages in our financial lives. Maybe you’re a new graduate just starting your career. Perhaps you’re just getting back on your feet financially after experiencing a hardship. Even if you’re in great shape financially, anything you can do to save more is a boon.

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When I talk to people about their financial goals, having enough money to retire at a desired age and lifestyle is their number one aspiration. They don’t want to be forced to work into old age or to live on much less than they do now.

Many people dream about having the financial freedom in retirement to live where they want, travel when they want, or volunteer full-time in their community. Having more financial security increases your retirement options and gives you more peace of mind.

If you’re woefully behind on saving, I’m sure you have your reasons. In this article, I’ll review three common excuses that can keep you poor, and how to overcome them. You’ll get solid solutions to save more for retirement, no matter how much or little money you have.

3 Excuses Keeping You from Saving for Retirement

  1. You plan to start saving when you earn more money.
  2. You don’t have a retirement savings plan at work.
  3. You’re afraid of losing money.

Let’s review these common reasons why you may not be saving for retirement and easy ways to overcome your excuses.  

1. You plan to start saving when you earn more money.

I really understand this excuse, because it used to be my reason for not saving when I started working. You might think that because you’re young, have an entry-level job, or are starting a business, that you deserve a pass on saving.

No matter if it’s a fact or just a hope that you’ll earn more down the road, it’s never a valid reason to put off saving. Problem is, trying to catch up later usually doesn’t work.

The later you start saving, the more you have to save to reach your goals. Likewise, starting early allows you to save less and still end up with a bigger balance. It’s just a mathematical fact that you need both time and a good investment return in order to build wealth.

For example, let’s say you’re 27 years old and want to quit working at age 67, when you’re eligible for full Social Security retirement benefits. If you save about $400 a month or $5,000 per year, and earn a 7% average return, your retirement account would be worth $1.1 million. You’d contribute a total of $200,000 (40 years x $5,000) out of pocket.

Procrastination is expensive.

But if you wait until age 37 to start saving (the same amount with the same return), your  account would be worth less than half, or $500,000, when you’re 67. To have a 7-figure retirement, you’d have to invest $900 a month or almost $11,000 per year, from age 37 to 67.

Delaying your savings by 10 years means you must contribute $325,000, which is $125,000 more than if you had started investing a decade earlier. In other words, procrastination is expensive.

Saving early, even small amounts, is incredibly powerful because your balance mushrooms over time. It’s like the riddle you’ve probably heard about whether it’s better to accept an offer of $1 million, or to take a penny that doubles in value every day for 30 days.

Surprisingly, the pennies are the smart choice because they add up to more than $5.3 million by the 30th day!

  • Day 1: $.01 
  • Day 2: $.02 
  • Day 3: $.04 
  • Day 4: $.08 
  • Day 5: $.16 
  • Day 6: $.32 
  • Day 7: $.64 
  • Day 8: $1.28 
  • Day 9: $2.56 
  • Day 10: $5.12 
  • Day 11: $10.24 
  • Day 12: $20.48  
  • Day 13: $40.96 
  • Day 14: $81.92 
  • Day 15: $163.84 
  • Day 16: $327.68 
  • Day 17: $655.36 
  • Day 18: $1,310.72 
  • Day 19: $2,621.44 
  • Day 20: $5,242.88 
  • Day 21: $10,485.76 
  • Day 22: $20,971.52 
  • Day 23: $41,943.04 
  • Day 24: $83,886.08 
  • Day 25: $167,772.16 
  • Day 26: $335,544.32 
  • Day 27: $671,088.64 
  • Day 28: $1,342,177.28 
  • Day 29: $2,684,354.56 
  • Day 30: $5,368,709.12

Putting time on your side can explode your wealth due to the power of compounding interest. It allows your investment balance to grow exponentially as you earn interest on interest that you already earned. This is the secret to creating a massive retirement nest egg!

If you’re struggling to save, you simply have to find ways to earn more, spend less, or do both. Review your expenses objectively and cut every unnecessary cost that you can. Sometimes reducing your largest expenses, such as housing and transportation, is the key to freeing up more money.  

Even if you can’t save as much as you’d like, get in the habit of saving something, even if it’s just 1% of your gross income. If you earn $30,000, saving 1% comes to $300 a year or $25 a month.

There’s no shame in starting small, nor is there a requirement to invest consistently, although that’s what I recommend. You’re eligible to participate in a retirement account even if you make tiny deposits or choose to temporarily stop making them.

Creating the habit of saving is more important than the amount you save. Once you start and see your account balance grow, you’ll get excited about building wealth and have the confidence to maintain momentum. Make a goal to just get started and increase your savings rate over time.

Stop using excuses like, I don’t make enough money, my expenses are too high, or I’ll start saving later on. If you wait for a someday raise, bonus, or windfall, you’re burning precious time, which is hazardous to your financial future.


About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.