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Best 5 Common Excuses for Not Saving Money!

On any personal finance advising blogs, you will largely hear only about long term investment plans- and rightly so, long term investment plans are a necessity and the options you have while going for long term investments are immense. however, despite all the benefits, there are a small group of people who have found more success with short term investment plans rather than long term plans. To be an intelligent investor means you do a mix of short term and long term tax saving investments in your lifetime.

Reasons to Invest Short Term

No Money for Investing Long Term

The benefits of long term tax saving investments are known to everyone, but what is the use of tax saving investments when there is no tax to save. What we mean is, not everyone starts out with a high paying job to have money at hand for investing. When your earnings are low, or you have very less money to work with at the moment, choose to go for short term investments such as liquid funds or fixed maturity plans instead of long term tax saving investments or life insurance.

Need Money Right Now

We all are sometimes in a position where we need a buffer of money in say, within an year. During such times, no amount of long term investments can come to your aid. Life insurance may even be hurtful to your cause in this case, as you will have to pay out some premium, thereby losing money at hand. In such cases, opening yourself up to immense short term investments are a great option, albeit with a little more risk. This is why, it is always advised to rest on life insurance opportunities until after you are financially secure.

No Responsibility, No need for Life Insurance

It does not make sense to buy life insurance or dive into tax saving investments, if you do not have to save for anyone else except yourself. With lack of responsibility comes financial freedom, meaning, despite all the pressure from people to go for life insurance, retirement planning or other tax saving investments, the same urgency does not apply to you. During such times, it is wiser to invest such that you keep getting intermittent money at hand, which you can later commit to make a lump sum and then, either when tax applies to you, or you a have a family to look after, you can go for investing lump sums into tax saving investments or buy life insurance plans.

Zero knowledge About Money

Despite all the financial advice available on the internet, anyone who hasn’t tested the waters of investment will not be able to understand a single term about long term investment plans. In this case, one thing will be clearly understood by everyone- with this ‘X’ plan, I will get increased returns in 1.5 years as compared to the ‘Y’ plan that will only help me after 45 years. Don’t get us wrong, we are not trying to undermine the 45 years long plan, if you are financially stable, mostly, the 45-year plan is a better option. However, when you are starting out in the investment sector, go for what you easily understand first.

Love to Take Risks?

There are risky investments available for long term too and there are safer investments available for short term. However, if you have no problem taking risks, short term plans are for you. Arbitrage funds, ultra short term funds are all great options for you when you are willing to take risks in your investment (keep in mind if the capital you have at hand is flourishing, investing in stocks is almost always a better option).

Try to plan your investment endeavor such that these risks come at the earlier stages of your life rather than the important ones. With long term investment plans, it is your choice whether to take risks or not, whether you want income right now or at your retirement, whether you want a 10 year or a 15-year plan.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


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