Have you ever felt that you couldn't save money no matter how hard you tried? Do you ever feel like every time you try to make a financial progress, you're met with an unforeseen expense that forces you to take two steps back?
I've been there before. In fact, almost everyone I know has been there at some point. At the very least, you're not alone. However, this does not imply that you should simply accept it.
Rather, you must seize your financial life by the horns and wrestle it to the ground if you want to ultimately reach a place where you are constantly depositing money into savings.
You've come to the perfect location if you're ready to do that.
I'll go through 21 of the most common reasons people can't save money and how to overcome them in the rest of this article.
1. You don't have a good grasp of personal finance.
It is not a natural ability to manage your finances efficiently in order to save money. To put it another way, you aren't going to wake up one day and start making excellent financial decisions. If you want to be good with your money, you must first understand how to manage it.
That implies you'll have to devote time and effort to personal financial research and education. So pick up a book, subscribe to several personal finance blogs (such as this one), or enroll in a personal finance course. Whatever path you select, make it a point to master the ins and outs of money management.
If you're not sure where to begin, I highly recommend Christopher Pollard's "Save or Slave: How to Save Money Like Your Freedom Depends on It" here. This is the book that changed my financial condition, and it's a terrific place to start if you're want to get out of debt, save money, and build wealth.
2. You're unprepared for unexpected expenses and emergencies.
One of the most demoralizing aspects of conserving money is unexpected expenses. As I stated at the outset of this piece, it's like taking one step forward and being knocked back two steps.
But, to be honest, I think the term "unexpected expenses" is a bit of a cop-out. Why? Because unforeseen expenses (medical bills, auto repairs, home repairs, and so on) are a part of life, and you should EXPECT them to occur. You should also plan for them by setting aside an emergency fund.
If you never took the time to plan for unexpected expenses, you'll almost certainly find yourself in debt to cover them. This is a reactive approach to financial management, and paying debt for unexpected expenses ties up your income and prevents you from saving.
3. You are not a frugal person.
If you haven't been able to save any money and aren't currently living on a budget, now is the time to begin. If you want to start or raise the amount of money you save each month, budgeting is a must.
Budgeting is the most effective strategy to plan and track your financial goals. How can you expect to save money if you aren't doing that?
If conserving money is a top concern, make a budget right now and start managing your finances.
4. You owe money on your credit cards.
Credit card debt is one of the most dangerous things you can do to your finances. Credit card debt makes conserving money much more difficult due to the simplicity with which you can spend over your means and the hefty interest rates that drain money from your life.
Furthermore, credit card debt has a habit of sticking around for a long period. What begins as a modest, seemingly innocuous amount quickly accumulates, and before you realize it, your minimum payments alone are costing you hundreds of dollars per month.
Every dollar you pay a credit card company is a dollar you won't be able to save. So, if you want to save money, you should stop using credit cards and break the loop.
5. You Have a Debt on Your Automobile.
Did you know that the average monthly auto payment in the United States is above $500? Worse yet, loan terms are becoming increasingly lengthier. Making monthly auto payments, similar to credit card debt, severely limits the amount of money you may save.
Consider this: if you pay $500 per month on a car payment, you are sacrificing $6,000 in savings every year. That's a substantial sum of money.
For that amount of money, you could take two or three pretty good trips per year. Alternatively, you might put that money into an emergency fund and finally get ahead of some of those unforeseen costs. You may even put that money into your retirement account and watch it grow for decades.
Car payments make it tough to save money. So, if you want to save money, you should either pay off your car or sell it. It's not worth risking your financial security for a good set of wheels.
6. You purchased more property than you require.
Most people are reluctant to confess that they have purchased a home that they cannot afford. However, if you're paying more than 25% of your monthly income on a mortgage and can't manage to save any money, it's likely that your home is to blame.
It's also a huge impediment to your savings.
With a car payment and credit card debt on top of it, your chances of saving money are dwindling.
With a car payment and credit card debt on top of it, your chances of saving money are dwindling.
To be clear, I am not suggesting that you sell your home. That is a really personal and one-of-a-kind decision. I'm only suggesting that if you're wondering why you can't save any money, you should take an honest look at your mortgage and see if it's preventing you from doing so.
7. You owe money on your student loans.
The average student loan payment, according to the Federal Reserve, is between $200 and $299 per month.
And for some folks, it's even higher.
To put it another way, student loan debt wreaks havoc on your ability to save money. It can eat up a significant percentage of your monthly income, similar to a vehicle payment. And the longer you wait to pay off that debt, the more difficult it will be to save money.
8. You're overpaying your rent.
I can confirm to the fact that rent is currently at an all-time high. And things are only getting worse. It can substantially impede your ability to save money, just as spending too much for a mortgage.
As a general rule, you should only spend 25% to 30% of your monthly take-home pay on rent. If your rent is greater than that and you can't afford to save money, you may want to look for a new place to rent.
This is also where the idea of conflating wants and necessities enters the picture. For example, if installing granite countertops in your apartment will cost you an extra $100 per month, you don't need them. You don't need a garage if it will cost you an extra $125 per month in rent. When renting, there are numerous enhancements and conveniences that are good to have, but they aren't worth it if they deplete your bank account.
9. Eating at your favorite restaurant (which can be expensive)?
You might be dining out too much if you're wondering where your money goes each month and why you can't save any of it.
For example, if my wife and I are extremely conscientious about grocery shopping and meal planning, we will spend around $500 per month on food. We wouldn't have any trouble blowing our monthly food budget if we became lazy and ate out more than we should.
Dining out is delicious, enjoyable, and convenient, but it can also be costly if you aren't careful.
10. You're paying for cable when you don't have the means to do so.
The average monthly cable cost, according to the NPD Group (a market research firm), is roughly $120. The typical cable cost is predicted to reach around $200 per month by 2020 and double that by 2021.
You shouldn't be paying for cable if you can't afford it. That's all there is to it!
You are preventing yourself from saving more money by paying for cable when you cannot afford it. All of this adds up to you having no money.
11. You believe you are entitled to the stuff you purchase.
Yes, it maybe fantastic and believe you are deserving of something, but should you really be purchasing it? It doesn't imply you should buy a 100-inch 4k Smart TV just because someone else did (or a mansion, great car, gadgets, or pay for a ridiculously expensive wedding, for example).
You might believe to yourself, "Well, they have a job similar to mine, therefore if they can afford it, so can I."
You, on the other hand, have no idea how this individual will pay for it. Perhaps they have been saving for years, or perhaps they are simply putting everything on their credit card.
You are depriving yourself of money by believing that you deserve everything. Instead, be honest with yourself about your financial circumstances and buy just what you can genuinely afford.
12. Your cell phone bill is excessive.
The majority of consumers overpay for their cell phone service. If you can't afford to pay your bills, pay down debt, and so on, you should consider either getting rid of your mobile phone (yes, this is feasible, and some people do) or switching to a more economical cell phone and provider.
13. You come up with excuses for why you don't have any money.
Everyone makes excuses, and I'm sure that they will continue to do so until they discover that excuses are just that: excuses.
Consider the last time you said something like, "That won't work for me because (fill in the blank)."
I hear a lot of excuses for why people are unable to save money, pay off debt, live the life they desire, retire, and so on.
There are numerous real reasons why some people face financial difficulties, yet many people continue to make excuses for why they are unable to attain their goals or why their lives are unhappy.
Making excuses is a negative money habit that can hold you back, which means you may never achieve your financial or life objectives.
Simply said, excuses keep you from living the life you desire. You've already given up before you've even started.
14. You believe you will be able to save money later.
Many people believe that they do not need to save now because they will be able to save later when they are older. So, what will you do if something bad happens to you or if an emergency arises?
Starting now will assist you in developing solid financial habits and will better prepare you for the future than if you wait.
15. You don't believe that small sums add up.
You may be cash-strapped because you don't believe that tiny sums of money will help you.
Someone once told me that they don't and can't save money because they don't believe it counts. So, even if they have an additional $100 in their budget each month, they will spend it since they don't see the sense in saving it.
16. How to Begin Putting Money Aside.
Okay, at this point, we've found a variety of reasons why you could be having trouble saving money. Let us now discuss how to turn things around.
In this next section number 17 is very important. I'll give you a few pointers on how to overcome your financial difficulties and ultimately start saving money.
I will caution you, though, that there is no such thing as a quick cure when it comes to personal money. It takes effort, sacrifice, determination, and discipline to overcome your inability to save money. Anyone else who tells you otherwise is lying to you.
However, the rewards are well worth the effort if you are prepared to put in the effort and battle to improve your financial situation.
17. Stop playing the financial defense game.
When it comes to personal finance, I'll be honest with you: I'm a little impatient. When my wife and I set a financial goal, I would rather work twice as hard in half the time to reach it than keep to a slow schedule. To put it another way, I despise playing financial defense. I enjoy launching attacks.
You must also adopt an offensive, attack, and stay on course mindset if you wish to improve your financial status.
This entails committing to and following through on financial obligations such as budgeting, bill payment, earning an income, and debt repayment. It entails going all out and taking daily actions to better your financial status. Above all, it entails perseverance in the face of adversity.
You will be shocked at the outcomes you may get when you resolve to attack your financial goals.
18. Take charge of your finances.
This should go without saying, but if you can't save money, you need to learn to restrict your spending. If you are unwilling to change your financial habits, it will do you no good to continue through life grumbling about how you can't save money.
To get your spending under control, you must first create a budget, track your spending every day, and reduce your expenses to the bare minimum. I'm not talking about canceling a few modest subscriptions or turning off lights more frequently to save money on your electricity bill. I'm talking about eliminating all unnecessary expenses from your budget until you're debt-free and have a six-month emergency fund set aside.
19. Eliminate Your Debt (For Good).
If you have any debt, try to pay it off as soon as possible. Every dollar you spend on debt is another opportunity to save money and improve your financial status.
And if you can't save any money, you'll have to do whatever it takes to add some financial cushion to your life.
Shred those money-draining pieces of plastic and get to work paying them off if you're drowning in credit card debt.
If you can't save any money because you're paying hundreds of dollars a month on a car loan, sell it and replace it with an inexpensive, used automobile. You don't need a backup camera or a navigation system. You'll need an emergency reserve as well as a rising net worth.
Make a plan to pay off your college loans and stick to it. Your college education was supposed to help you earn more money, not bury you in monthly payments for the rest of your life.
Any debt you have is detrimental to your financial future, so pay it off as soon as feasible.
20. Put money aside first.
If you want to save money, put it at the top of your financial priority list. To put it another way, as soon as you receive a paycheck, decide how much you want to save and deposit the funds into your savings account. Then live off the money that's left.
Don't let how much you spend decide how much money you save each month. Instead, let your savings dictate how much you can spend.
21. Increase Your Earnings (Seriously).
When you can't manage to save any money, sometimes the greatest option is to earn more. This is particularly useful if you need to pay off debt but don't have any more money in your budget.
You basically have two options if you want to make some extra cash. You can either go for a second job or create your own side business. The first alternative may not appear spectacular, but adding a second job to your monthly income can add up to $1,000, which can help you pay off debt quickly.
Starting a side business is riskier, but in many cases, it may grow into a lucrative full-time job. So, if you have a passion for something and can earn money doing it, don't put it off any longer.
Just make sure you don't create a side business that will set you back a lot of money. The goal is to make more money so that you can save money in the end. When you're in a better financial position, you can consider starting a business that takes some initial investment.
There are many factors that can prevent you from saving money. You'll be well on your way to a better financial situation if you take the time to figure out why you can't save money and how to overcome those obstacles.
I hope these 21 tips will assist you in doing so!
Good Luck to You.