“I can’t afford to save for my future right now, I’m already struggling to make ends meet.”

Don't become an old man, filled with regret.

The Federal Reserve Board recently found that 31%, nearly one third of American adults had no savings or pension to help them afford retirement.  The survey also found that 19% of adults between ages 55 and 64 had no savings.

What are these survey respondents going to do about retirement? 

Many said they planned on working full or part-time in their retirement years.  25% of survey respondents had no idea how they could afford retirement at all. 

If you don’t save for your future, you will one day reach retirement age with no money.  Your excuses won’t matter by then.  Do you want to be filled with the regret of not saving more during your working years?

Have you started saving for your retirement yet?  If not, what’s your excuse?

The most popular excuse I’ve heard:

“I can’t afford to save for my future right now, I’m already struggling to make ends meet.”

My response: this is a cash flow problem. 

Cutting your costs matter

If you spend all the money that you make, you will never be able to stop working.  If you cannot learn to live on less than you earn, you will never be able to reach financial freedom.  Whether help is from the government, your parents, or your adult children, you will always be dependent on financial aid. 

Cutting back on your spending can be even more important than earning more money.  According to Mr. Money Mustache, frugality is a muscle that can be strengthened.  There are 3 benefits of cutting costs: you save more in the short term, you need to spend less in the long term, and you become more of a badass. 

Give yourself a raise

In my own experience, cutting back on your expenses is like giving yourself a permanent lifestyle raise.  We’ve easily cut a lot of our expenses in the last 2 years. 

We’ve cut our auto insurance rates by $95 per month by switching our auto insurance to Geico.  We’ve cut our cell phone bill from $150 a month down to $15.  We’ve cut our satellite television bill from $70 a month to $0. While the average electricity bill in our area is $150 a month, we’ve cut our electricity bill down to about $35 a month.  While we used to spend $70 a month on dry cleaning, we now spend $0.  While I used to spend $56 a month getting hair cuts, my wife cuts my hair for free. While I used to buy lunch at work everyday for $180 a month, now I mostly bring lunch to work, bringing that cost down to $40.  By renting out 2 of our bedrooms, we’ve saved $1,250 on our mortgage.

These few cut backs have saved us $1,931 per month.  That’s like giving ourselves a $23,172 annual raise.  Could you also use a $23,172 annual raise?  These are just some of the easy things we’ve cut back on.

Making more money is not the only solution

While making more money can certainly make your lifestyle more comfortable, earning more is not the only answer to your cash flow problems.  I know people who make over $200K a year who have money problems.  Their solution: “I just need to make more money.”

Generally, the longer you work, the more opportunities you have to advance your career and your salary.  With each salary increase, this is a chance to invest more in your financial freedom.  If you can’t get a raise at work, you can use your creativity to make money with side hustles.

The take home message

If you’re struggling to make ends meet, you have a cash flow problem.  You need to increase your income and decrease your expenses, simple as that.   Fixing your cash flow problem is the start you need to have money available to fund your own financial freedom.  Always watch your spending levels, or you will end up with financial troubles - no matter what your income level is.