Tear Down Your Barriers to Saving—And Cross the Bridge to Financial Success

By Lisa Philios
FINRA Foundation Military Spouse Fellow (2010 Graduate)

What barriers stand in your way when it comes to saving? Everyone faces challenges at some point in time. However, failure to overcome these obstacles may delay—or prevent—your financial success.

Postponing saving can be costly in the long-run. The Thrift Savings Plan (TSP) website states, "The more years you have to save, the more effective it is. So the earlier you begin...and the longer you are able to leave the money in your account, the greater the opportunity you have to enjoy the benefits of compounding."

As you can see in the chart below, if you have $500 and put it into a savings account now at an interest rate of 1%, and you add $200 to your account every year, you will have $2,666 at the end of 10 years.

But if you wait two years before placing your $500 into a savings account at an interest rate of 1%, and you add $200 to your account every year, you will have just $2,226 at the end of 10 years—that’s a difference of $440.

$440 may not sound like much, but every little bit helps in the grand scheme of saving. In fact, that was the theme for Military Saves Week 2012—"Start Small, Think Big."

Postponing Saving Could Cost You $440
Cost of Waiting to Save Two Years

What are some obstacles when it comes to saving?

"No pain, no gain"

  • High expenses. [You] "My bills take up my entire paycheck." [Me] "Allocate money into savings from a portion of your entire paycheck." If you feel like your expenses consume your income, review your expenses and decide which to cancel or minimize. Remember, live within your means, but below your needs. That means take home pay should always exceed monthly expenses.
  • Low Income. [You] "If only I earned more, I could save more." [Me] "You can save money with the income you currently earn." The myth associated with high-income earners saving more is false. Truth: financial problems don’t discriminate. They affect all ages and social classes. Studies have shown that modest income earners who saved diligently have an extremely high net worth.
  • Lack of Time. [You] "I don’t have time to save." [Me] "Your time to save starts today." Set a day to review your current financial situation every month. The fact is, you cannot afford to procrastinate. As America Saves states, "One of the most important things you can learn in life is how to save money. It’s the first step to getting where you want to be….once you start it gets easier and easier."
  • Lack of Information. [You] "Saving is hard; I don’t know where to find knowledgeable information about it." [Me] "You’re in luck. There are plenty of resources about saving for military and civilians alike." Getting your boots on the ground for financial success is just a click away. Military Saves’ resources and SaveAndInvest.org can point you in the right direction.

Let's turn your barriers into bridges!

"A penny saved is a penny earned"

  • Begin With a Budget. Using a budget helps identify money that enters your household and how the money leaves. When your finances are written down, it becomes increasingly clear where you stand financially every month and helps you identify areas where you can scale back spending and increase saving. Action Plan: Track Your Spending.
  • Change Your Thinking. Stay motivated, push forward and choose to save. Find your tribe—surround yourself with people who share your financial goals. Avoid keeping up with the Joneses. Remain positive and stay on track with your saving goals.
  • Shed Debt. See what Military One Source has to say about shedding debt. Saving may not feel like an option when debt is lying heavily on your shoulders. However, paying off debt will free up funds for depositing into a saving or retirement account. Action Plan: Dig Yourself Out of Debt.
  • Programs Offer Help. With tax time around the corner, Bonds Make it Easy points out how easy it is to purchase bonds from your tax return. The TSP is another great resource for saving, since expenses charged to each TSP account are approximately 25 cents per $1,000 of investment.

Excited about saving? Track your progress with SaveAndInvest's Savings Calculator. Your mission: break down the barriers you face, because waiting to save can be detrimental to your financial health.