You have no idea how to invest
Investing or saving money for the future can be challenging and downright puzzling. Roth versus the traditional IRA or terms like yields, P/E ratio, dividends, etc. is enough to make you give up and postpone your decisions for some other time. “Don’t let indecisiveness lead to you to inaction. Talk to a financial advisor who can counsel you on these decisions and work with you on a financial plan that accomplishes both your short and long-term goals,” suggests Matt Rogers, CFP®, manager, Financial Planning Group, at eMoney Advisor.
Your savings don’t match your raises
If you’ve already started putting some money aside on a weekly or monthly basis, goo for you! But what’s your plan in case you get a raise? Will you also increase the amount you put away or spend the extra money on a new car, more entertainment or holidays?
According to Rogers, this is the best approach: “Each year, if you get a raise, increase the actual percentage you are saving”. “For instance, if you get at 4 percent raise, boost your savings percentage by 2 percent and keep a 2 percent raise.” You win either way!