If you don’t know the reason why you have trouble saving money, they it will be hard to make any positive changes.
Confronting the reasons why you are stuck will help you create a plan, and the earlier you confront your financial situation, the better. This article mostly confronts the reasons you might have trouble saving money.
11 Reasons Why You May Have Trouble Saving Money
1. You don’t want to have to live on a budget
Many people think that saving is difficult because it would require some drastic budgeting. While budgeting can help, the real trick behind saving money is to automate your savings and pay yourself first.
For example, I have a healthy savings rate, but I don’t consciously save. I did the work of setting up an automatic monthly withdraw to go into my savings account and retirement account. I spend the rest of it willy-nilly! This way, I don’t feel like I have to live by a rigorous budget.
Taking the time to set up this system once has major benefits going forward. I can say it was the one thing I did that changed my money situation immensely. If I had to give you just ONE thing to do if you told me you have trouble saving money, I would tell you to set up an automatic savings account with ANY amount to start.
2. You think you will have time to save later
Many people think that they don’t have to save now because they will have time later when they are older. Perhaps they are even thinking they will be making more later which will make it more possible to save.
The truth of the matter is, savings rates stay fairly consistent across all age groups. In a survey done by GoBankingRates it was found that saving may have more to do with bad habits and personality rather than someone’s age. Even people who make a high income or are older, end up living paycheck to paycheck because as they make more, they spend more.
In the survey done by GoBankingRates, for ALL AGE GROUPS, 30% of Americans had $0 saved! That means 1 in 3 people have nothing saved.
Understanding that you may have trouble saving money might be due to a habit can be a good thing! Habits can be shifted. Forming good financial habits early can help you be better prepared for the future. This is not about when you can save… it’s about changing habits now.
3. You believe you will have lots of time to pay off your debts
When I was in college and started my side hustle business, I remember spending money on my student loans and using credit cards to get my business going. After racking up $15,000 in one year, I remember feeling uneasy as I watched this number climb higher and higher. When I asked some friends how they were handling the stress of money, many of them said they were just using student loans and credit cards now to get them through school and they would worry about paying them off later. Some of them even had jobs and could afford to pay for school but chose to borrow money anyway.
I had a little sit down with myself and decided to spreadsheet all of my income and expenses and realized in that moment, I was living way beyond my means. I had to ask myself, “Did I really need to spend money on designer clothes each month? Or would I rather put that money towards my debts and be free of them all?”
Thank goodness I asked myself that questions! I am extremely happy to have paid off my student loan debt. And I even did it in a year!
I still enjoyed my life, but I found creative ways to do that while I was paying off my debt. I don’t feel like I suffered at all. In fact, it was a huge relief to see that debt amount decrease month by month! I had a new goal in place and created a plan to get there.
There are many other reasons to pay off debt now rather than later. If you accumulate debt and only pay minimums on the balance due, the interest starts to compound with time, and not in your favor! At some point, it starts to feel like an insurmountable amount of debt. Also, you may not know when you need to have money for a bad situation in the future. If you wait to pay off your debt, you might be trying to tackle paying down debt when a financial calamity strikes. How would you handle all of this if say you lost your job, encountered high medical bills, or some other emergency?
Having your debts paid off can be one less thing to worry about when other surprises come up.
4. You treat your credit card as your income
I know when I first got a credit card, I didn’t really understand how to use it effectively. Even though my parents are financially savvy, (and I’m sure they tried to explain it to me), I didn’t really get that a credit card is not a new source of income. This is why I ended up with over $15,000 in credit card debt in one year! If you are seeing your credit card balances continually go up month by month, then you should do one of two things. Use my trick of placing your cards into a Ziplock bag of water and freezing them or cancel your credit cards.
The best way to utilize a credit card is to pay off your balance each month so that you are not racking up interest charges and late fees. Also, paying off your card each month improves your credit rating which can help you when you need to get a home loan, car loan, etc. And, you can even get cards which PAY YOU MONEY each month. What does it feel like to have the credit card companies paying me to use their cards every month? AHHHH-MAZING!
5. You can’t even afford cable
Did you know that the average monthly cable bill is around $100 a month. According to Leichtman Research Group the average cable bill is rising.
If you are having trouble saving money, your cable bill might be one place to start. By paying hefty prices for cable, you are preventing yourself from saving money. It would be worth it to sit down and take a look at your cable bill to see what it includes. Sometimes there are packages attached which you can eliminate to reduce your bill.
If you have a goal of saving each month, you could try completely cutting your cable off and get a digital antenna instead. These little bad boys are awesome. Once you hook it up, it makes it so you can receive local channels for free! These include most of the major network stations. I highly recommend a digital antenna if you are wanting to save $100 a month!
6. Everyone has debt so it’s ok if I do too
Dont’ get trapped in thinking debt is normal. That will just keep you in debt longer! Trust me, I used to say that all the time and it got me nowhere fast.
When I started realizing I really felt uncomfortable having debt was the moment it started to change for me. Seriously, does having debt make you sleep better or worse at night?
Saying that everyone has debt is like saying because my friend is overeating, I should too. It makes no sense! You are unique and will have a different situation than your friend. He might be overeating because he is building muscle right now! There is a time for spending money and taking risks. And it’s not when you have no clue what your money plan even is!
Don’t buy into the Jones’ mentality. Just because someone else has $50,000 worth of credit card debt from buying too material things does not mean that you should too. I can guarantee you that the person with that amount of debt is feeling anxious on the inside even if they aren’t showing it on the outside.
7. Thinking you deserve the items you buy
This is another trap that can lead to really poor spending decisions which in turn leads to you having trouble saving money.
Maybe you have been saving money for some time. And you’ve worked hard through the years. And then at some point, this thought creeps in, “I deserve a nice car.”
So without thinking practically or researching, you go and do it.
After a few months, you realize it was an impulse buy. You get buyer’s remorse. And suddenly it doesn’t feel like such a great idea anymore.
Look, I totally understand wanting to reward yourself. And I’m a big believer in taking good care of yourself. But make sure to give your purchases some thought. This is why I suggest freezing your credit cards in a baggy of water. Because it takes you a day to thaw them out, it requires you to think about what you are about to do.
By getting into believing that you deserve something, it can lead to some costly mistakes. Instead, be realistic about your financial situation. Crunch the numbers. Take a day, week or better yet, a month to make the decision. You might just find that after a month, you forget about needing that shiny object anyway.
8. You don’t have a budget in place
If you don’t have a budget, it could be the reason you have trouble saving money. Taking a simple look at where you are spending your money, how you are prioritizing your spending and getting realistic about needs vs. wants can help you and your family manage your money better. You can do this on a spreadsheet, on a whiteboard or simply on a piece of paper.
My parents were very transparent about their bills. They showed us their monthly budget, how they wrote checks for their bills each month and they let us know when we needed to help by being more frugal. They also encouraged us to be creative about coming up with ways to make extra cash to buy things we wanted. For example, we collected recyclables and turned them in for cash back. We saved the cash in a jar and after a few months, we earned enough to purchase a new TV for our playroom.
A budget can help you realize where you might need to make adjustments in spending. It can also help you face your financial issues head on. Many people are afraid to create a budget because it means that they will have to actually face their money issues. Actually, the sooner you face your fears, the quicker you will be able to make real long lasting changes.
9. Your Car is a Gas Guzzler
It may not be just the gas that is consuming all of your extra money. Cars tend to be a major expense for the average family. According to Edmunds.com the average monthly payment for a new car is $483 for someone living in the U.S. Then add on the cost of gas, registration, insurance, taxes, maintenance, etc.
My husband traded in his Nissan X-terra for a Volkswagon Golf because he was spending about $550 a month in gasoline on the X-terra. He was able to spreadsheet his miles per gallon and the cost over a month and found that if he purchased a Golf, it would lower his gas to about $225 a month! It was an immediate savings of $225 a month. He has been adding this extra money to his retirement account automatically ever since.
10. You confuse “needs” and “wants”
Once you start budgeting, you can see what things are needs and which are wants. You might have trouble saving money if you are confusing wants with needs.
Needs are everyday essentials, such as a place to live, food and water, a certain amount of clothing, and toiletries.
If you are looking for ways to start cutting back, take a look at some of the things that are wants in your budget. You may even want to prioritize your budget list with needs at the top and wants lower down the list. This makes it easier for you to look at where you can cut back when you need to.
Take a look at where you may have signed up for monthly memberships such as the gym, cable or music. You could also get a cheaper cell phone plan, eat out less, and give up your daily coffee. Cutting back or eliminating these items can free up money for you to save almost immediately.
If you can find just an extra $100 a month, and you save it every month for a year, you will end up with $1200 at the end of the year.
11. You don’t make enough money
The biggest reason I hear people say they have trouble saving is because they don’t feel like they make enough money.
It is true that if you are spending more than you are earning, then you really don’t have enough. And if this is the case, then you have one of two choices…
You can either make more money, or you can cut back on your expenses. In order to even know what your situation is, you need to know your money situation with a budget.
If you have tried cutting back, then you may want to consider creating some sort of side hustle that will eventually turn into a business or passive income in the future.
I am a big believer in creating a business for you and your family because you create more opportunity for yourself this way. You are no longer working to make someone else rich. Rather, you are getting all the benefits from your hard work. I usually suggest to develop a side hustle while you are working. And then see that the numbers would increase if you were able to be more present for the business, then you have reached the “tipping point.”
Take a look at your entire day to see where you might have an extra hour or two to start something on the side. The average person watches over 30 hours of TV a week! Maybe you are spending a bunch of time on social media. Did you know that you can own your own business curating people’s Pinterest and Instagram accounts! See how you can convert what you might be already doing for free into an income stream. I noticed I was always helping my friends with major life issues, so I turned this into a coaching business. It is just one of the many things I do for extra income!
What might be a reason you are having trouble saving money? What is one way you can change that? What change can you make today?
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