We have all heard all sorts of advice about saving and budgeting. Experts tell us what we should be doing and how we should be doing it the best way. Family members tell us what we should be doing and how we should be doing it. Friends who seem to be doing better financially than we are will tell us how they have do in and what has worked for them. We should save more. We should save less. We should save three months of income for emergencies. We should have at least a years’ worth of savings. We don’t need savings as long as we have income, investments and credit. We should never rely on income investments or credit to live on. It all gets confusing and overwhelming. As for budgeting, that just plain seems scary and hard to stick to. Let’s look at 5 ways to think about saving and budgeting that will make them seem clearer and less confusing.
1. It’s never too late to start saving – In a perfect world we would have all started to save at age 20 and would have added regularly to it every month from then on. Obviously we don’t live in a perfect world. There are all sorts of circumstances and situations which get in the way of saving. There is nothing wrong with that. There is also nothing wrong with starting to save whenever you can. Starting at age 40 might not be as good as starting at age 20, but it is a whole lot better than starting at 50. The best time to begin is right now.
2. There is no such thing as too little – Some people don’t want to start saving because by the time they have paid all of their other bills they are only left with a little bit of money, so it doesn’t seem worth it. This is silly. Even a little bit makes a big difference. You have to consider that something is better than nothing, that you are benefiting from the interest which is letting your money grow and you are getting in the habit of saving, so you will be able to save more when you start making money. Start saving now, no matter how much you can save!
3. Don’t save too much – This sounds like contrary advice, but it really isn’t. Saving is important, but so is living today. If you are saving so much now that you can’t do or enjoy anything, then you begin to dislike savings. You will resent it and you will quit doing it. You are much better off saving a reasonable and sustainable amount now and continuing at that level for years to come.
4. Don’t think of it as a budget – Budget sounds like a negative word. It is all about constraints. Try calling it a spending plan instead. That sounds so much more positive and will make it easier to stick with it over the long run.