The number one reason is always that they don’t make enough. I wonder if people have done a careful analysis of whether they spend too much? It is human nature to look at one variable of the equation and not the others.
Here is the equation, with some examples:
Income – Expenses = Savings
$50,000 – $50,000 = $0
$60,000 – $50,000 = $10,000
$50,000 – $40,000 = $10,000
Yes, if your savings are $0, and your expenses equal your income, then making more would help you to save $10,000. However, by spending less and spending more wisely would also achieve the same effect. Eat out less, rent BluRays for $3 instead of spending $30 on a movie, etc, etc. By reducing the right side of the equation, your savings will go up.
If you create a budget and see where you are recklessly spending money, you’ll be surprised at how quickly you can knick away at the Expenses variable. Then take your savings and invest them in the S&P 500, so that American business can make money for you.
Get started now, before poor health and pain takes away your ability to work in your old age. Who wants to be broke when they are least able to do anything about it?
The No. 1 reason most people cite for not stashing more away for retirement is that they don’t earn enough to save.