I’ve been thinking about why people fail to save money and fund retirement accounts, and I think that I’ve come up with something.  “Saving money” is complicated.  Think about it.  How many different types of “savings accounts” are there?  Off the top of my head, I can list several: Online Savings Accounts, Money Market Accounts, Local Bank Savings Account.  Now, how many different types of “retirement accounts” are there? Roth IRAs, Traditional IRAs, 401Ks, Sep IRAs, 403bs, Roth 401ks, etc.  And “education savings accounts”?  ESAs, 529s, UTMAs, UGMAs.  These are just a few of the “account types” available for “saving money”.   It can get confusing.

After deciding the “account type”, a saver then must then learn about investing.  Should I buy Bonds? CDs? Stocks? ETFs? or Mutual Funds?  All of the above?  None of the above?  And once I decide WHAT to buy, I have to figure out Market Orders, Limit Orders, GTC, AON, Transaction Fees… The list goes on and on and on and on.  Figuring out what to buy, when to buy, and from whom to buy it can be overwhelming.

I’ve come to the conclusion that MANY people stay in debt because figuring out “how to save” appears to be too complicated.  Think about it.  Borrowing money is “simple”.  I know how much interest I have to pay, I know how long I have to make payments, and I can easily “do the math”.  Saving money is “complicated”.  Even if I manage to save some money in my checking account, eventually, I have to figure out “what to do with it”.  Should I put it into an emergency fund?  Should I fund my child’s ESA?  How about my wife’s Roth IRA?  Then, once I decide “where” the money should go, I have to figure out “what” I should do with the money.  What will my interest rate be?  What are the risks?  What are the rewards?  What happens when I work really, really hard to “save” $4000 in my Roth IRA and the stock market takes a dive and my $4000 turns into $2000?

I’ve yet to mention insurance, tax rates, inflation, or income limits.  So, what’s the point of this post?  Have I suddenly become “anti-savings”?  Am I suggesting that we all simply continue to borrow money because that’s “simple”?  No way.  What I’m suggesting is that, if you plan to be wealthy, you have to PLAN to be wealthy.  You need to learn as much as you can about as much as you can!  And, don’t wait until you’re “debt free” to learn about investing and investing accounts! Personally, I’ve mapped out my strategy for the next year, the next five years, the next 10 years, and the next 25 years.  I’ve taken the TIME to learn (a little) about investing and long-term money management.  Notice how this works.  Being broke and making payments is “simple”.  Building wealth and saving money can be “complicated”.

Over the next few days, I’ll write about my plans for the future, but I wanted to set the table and fully acknowledge that understanding the world of personal finance can be difficult,.  I’ve been writing about my personal finances for more than two years and I still have more “questions” than I do “answers”.  But, I’ll not let a “confusing system” keep me from building a future for my family.  In other words, my second job will be learning about managing the money I make at my first job.