How many times have you looked at the balance in your pension and savings accounts and told yourself a little white lie over why there’s not as much squirrelled away as you expected?
Everyone is in denial at some time about why they don’t save – and here are some of the lies we tell ourselves and how to recognise the real truth:
I’ll just take this from my savings and pay the amount back when I can
No you won’t. If you take cash from savings, then you have not got enough in your spending account, so how do you expect to make up the cash?
I have plenty of time to save for a pension
Ask anyone approaching retirement when they wished they started saving and they will say as soon as they started working. The secret is little and often – compound interest does the rest
I keep rainy day money in the bank
Don’t! Banks and building societies offer measly rates of interest and inflation eats into your cash reserves. Look for alternatives that offer easy access and more interest
I can’t pay my debts off
Yes you can but aim for more modest targets. If you owe £5,000 and can pay off an extra £500 a year, that’s a huge saving in interest and much more achievable than snatching cash from your day to day or savings budgets
I keep all my money invested in one fund
Diversification is a better policy. If one sector performs badly, the idea is another will step up with a better return to make up the deficit. Diversified funds have a balance of shares, property, cash and other assets
I can miss the odd bill replacement
No you can’t. Plenty of potential homebuyers have found they can’t get a mortgage because they did not pay a £20 mobile phone bill. Your credit rating is not important if you do not intend to borrow, but if you do, you need to make sure you pay your bills in full and on time.
I only get one crack at life
Yes you do and of course you should spend some money on holidays, hobbies and other luxuries, but not at the expense of saving for retirement and leaving yourself with a miserable income just above the poverty line
Read more:
