Saving money is essential. It’s one of the ways to secure your financial future and prepare for difficult times. There are many dangers of not saving money. But most people face trouble saving money. One common question is, why can’t I save money? If you can’t save money, read this article thoroughly.
This article will discuss 11 reasons why people have trouble saving money and how they can overcome those problems.
I Can’t Save money
It’s understandable if you don’t believe in saving money as a life principle. This could be the case if you’ve never needed to have an emergency fund in your life.
One could believe in the philosophy of being a “fast spender” to live life to the fullest by enjoying all of one’s money as it comes.
Remember that many people are having trouble saving money, just like you. It’s a common situation you can find yourself in at any time, especially if you’re a low-income earner. Unfortunately, that’s the reality for 4 in 10 American households earning less than $30,000 annually.
Money-Saving Facts and Statistics
Here are some money-saving facts and statistics which would be of interest if you’re having trouble saving money.
- About 4 in 10 people will take a loan if they face expenses that weren’t planned.
- Only 18% of Americans stated that they could survive on their emergency funds for a minimum of half a year.
- 16% of workers saved over 15% of their annual income.
- Close to 75% of millennials are gathering money for emergency funds.
- More than half of women don’t have an emergency fund.
- Individuals 54 years old or younger are more likely to accumulate over 10% of their yearly earnings than those 55 years or older.
Dangers of Not Saving Money
A recent study discovered that only a little more than 40% of adults in the United States would be able to settle unplanned expenses worth about $1,000 with the aid of savings. The implication is that the remaining percentage of people would end up borrowing—putting many of them in debt for a very long time. See other dangers of not saving money below.
- You’ll face difficulties when financing important events—for example, relocations, vacations, weddings, etc.
- Another danger of not saving money is that you won’t be able to help others financially or leave any inheritance money for your loved ones.
- Not saving for retirement could mean you’ll always have to work, especially when there’s no one to provide financial assistance to you after retirement or in old age.
- You’ll constantly find yourself lacking peace of mind. This is because most of your thoughts will always be settling financial problems when there’s no emergency fund to take care of unexpected expenses.
- Investing, becoming rich, or achieving financial freedom will be difficult.
Why Can’t I Save Money?
Saving money is essential, but it’s not always easy. People have trouble saving money for a variety of reasons, including:
1. Not having a plan
Knowing how much you need to save and where to allocate your funds is challenging without a plan. Unfortunately, you may be more likely to spend money on unnecessary things without a plan.
It might be that you don’t set up budgets or aren’t planning your spending well. For example, forget to include some expenses or too many “wants” in your budget.
2. Not knowing where your money is going
If you don’t keep track of your spending, it isn’t easy to know where your money is going. This makes saving hard because you may not realize how much you’re actually spending.
3. Living paycheck to paycheck
If you’re living paycheck to paycheck, it can be challenging to save money. This is because you may not have any extra money to put towards savings.
According to research, 38% of working-class people have too many bills to cover. This was stated as the typical reason individuals find it hard to save.
4. Having debt
If you have debt, you may feel like you need to use any extra money to make payments on your debt. Unfortunately, this can make it hard to save money.
5. Unexpected expenses
Unexpected medical bills or car repairs can be a significant setback when trying to save money. These expenses can make it challenging to keep up with your savings plan.
6. Feeling like you can’t save
If you feel like you can’t save, it may be because you think you need to save a lot of money. This can be daunting and make it hard to start saving.
7. Not earning enough
If you’re not making enough money, it can be challenging to save money. This is because you may not have any extra money to put towards savings.
16% of working-class people say that they’re not gathering enough savings due to their jobs not supporting them adequately.
It might be that your business hasn’t yet achieved profitability, so it’s hard for you to think of accumulating money for an emergency fund.
8. Not saving at the right age
Could it be that you’re not mentally prepared to adopt the habit, or the timing isn’t always right? 22% of millennials feel that they just haven’t been able to start saving at the right time yet. 16% of Americans feel the same.
Due to the time value of money, it will become hard for you if you start saving late in your life.
Procrastination is one of the biggest enemies of saving. If you keep putting off saving, you’ll never start.
10. Being a shopaholic
Not being in control of your buying impulses can be a factor. Do you always feel like purchasing everything that looks desirable to you, especially your favorite brands?
The term shopaholic refers to someone who loves to shop and often spends too much money. This can make it hard to save money.
11. Inadequate financial literacy
Inadequate financial literacy might be a problem. A study showed that a third of the kids wanted their parents to discuss finances with them. However, it also gathered that there’s a high probability for teenagers who achieved a significant level of financial literacy to practice the principle of saving as they get older.
How to Start Saving Money
Now that we’ve gone over some of the reasons why you may have trouble saving money let’s talk about how to start saving money.
Here are a few tips:
1. Make your mind
It starts with your psychology. For example, the other tips might not work if you are a shopaholic. Instead, have a solid determination to save and set goals.
2. Build an emergency fund
Once you have determined, let’s start with an emergency fund. You have to put some money aside for unexpected expenses like medical bills or car repairs.
Some experts advise that you should try to target a minimum of 15% of your earnings to be set apart for an emergency fund. However, you can choose any percentage that works for you.
3. Create a budget
If you don’t have a budget, it will be challenging to save money. So when you create a budget, be sure to include all of your expenses, both necessary and discretionary.
4. Track your spending
To save money, you need to know where your money is going. Tracking your spending can help you become more aware of your spending patterns.
Try recording your expenses using spreadsheets or a spending tracker/personal finance software application if necessary.
5. Automate your savings
One of the best ways to save money is to automate your savings. This means setting up a system where money is automatically transferred into your monthly savings account.
6. Pay yourself first
When you get paid, put some money into your savings account before spending any of your bills. This will help you make saving a priority.
Save money to invest in yourself. This can be done by taking courses, buying books, and attending seminars related to your career or personal development.
7. Start small
If you’re having trouble saving money, start small. Try to save $20 per week. Once you’ve saved up $20, you can start working on saving more.
8. Find ways to increase your income
If you’re not making enough money, it will be challenging to save money. One way to increase your income is to get a second job. Another way to increase your income is to start a side hustle.
9. Manage your debts
Settle your debts to have a fresh start, live a minimalist life, have a periodic budget, cut back on spending, and automate your savings (from checking accounts to savings accounts).
Put the things that you don’t need on sale. These are not the things whose value can appreciate. Then, from that sales earnings, settle your debts.
10. Cut your costs
You can cut costs by canceling unnecessary subscriptions, eating out less, cooking at home more, and finding ways to save on transportation.
You can also shop at places that offer more affordable prices, discount sales, redeemable coupons, and so on.
Plan staycations instead of vacations and reduce your visits to restaurants/cafes or takeout purchases.
11. Put your savings to work
Make your savings work for you by earning interest on money kept in a savings account or fixed/tenured account.
Then, try building your investment portfolio with the excess money. Start with low-risk (low-return) investment options—for example, stocks of financially sound companies, real estate, etc.
Saving money is essential, but it is not easy. If you’re having trouble saving money, try some of the tips listed above. You may also want to consider getting professional help. But the first thing is just to start taking action.
Watch this YouTube video to learn more about what to do if you have no money in your savings account:
How to Save Money When You’re Broke
Imagine that you don’t have a job and are short on money. Nonetheless, you’d still need to take care of expenses. You don’t need to have money to start saving. I can’t save money because I have no money – this statement shouldn’t be an excuse.
You can save in various ways, such as by making purchases for lower prices. Read the following suggestions to understand the above example and how to save money when you have none:
- Then, make up your mind to be determined to save.
- Buy discounted products or those that have been put in the “sales” section. This is called bargain shopping.
- Search for money-saving coupons.
- Utilize your credit card responsibly so you can get savings through cashback or reward points. These benefits can be exchanged for gift cards, hotel/travel benefits, etc.
- Cut unnecessary costs—for example, subscriptions to cable or streaming services.
- Learn the art of negotiation to get better deals.
- Sell things or property you can do away with and keep part of the money as savings.
Best Ways to Save Money
We suggest five online courses from Teachable, Coursera, and Udemy relevant to personal finance and savings. Articles from Positive Worklife will also be helpful for you. Together, these will help if you’re having trouble saving money.
Students will learn how to get funds to establish a startup while saving time and big sums of money.
This course was designed to introduce young adults to fundamental terms in financial management, including a budget, investment, savings, etc.
This course will guide you in setting and actualizing your saving goals and objectives.
Students will learn how to save much by making easy adjustments to their spending habits.
You’ll be taught the principles of saving and how to build an investment portfolio by a seasoned expert with over a decade of experience in investment.
Articles from Positive Worklife
- Best Personal Finance Books for Young Adults
- Best Outdoor Jobs without a Degree that Pay Well
- Best Advice for High School Graduates from Successful People
The tips below will be of help to you when thinking of what to do if you have no money:
1. Look for a job that pays daily—for example, odd jobs.
2. Start a small business that requires no capital.
3. Begin a side hustle/second job/passive income stream to support your job or business.
4. Ask for financial help from others, especially people close to you.
5. Apply for government programs that grant financial aid.
6. Research on emergency financial programs and apply for them.
7. Get rid of addictions or vices that make you spend money unnecessarily. For example, alcoholism, smoking, gambling, purchasing lottery tickets, eating meals and taking drinks purchased from restaurants or cafes too many times, etc.
8. Sell things/property that you can afford to lose in the meantime.
A study showed that people at all income levels weren’t saving much. This indicates that it’s hard for some rich people to save money. The following points may explain why:
1. Spending before you set aside money to save.
2. Unnecessarily increasing the amount of money you spend in response to your growing income.
3. Experts state that some people are psychologically inclined to spend much of their income because they enjoy doing so.
Learning how to save money when you have none is the same thing as knowing how to save money when you’re broke. Refer to the subheading “How to Save Money When You’re Broke” treated earlier for answers to this question.
It’s not a bad idea to compel yourself to have an emergency fund. Just follow any of the tips below. You can use them as part of the points given for how to save money when you have none and how to save money when you’re broke.
– Set a waiting period after earning a significant amount of money (periodic or irregular) before making a big purchase or going on a spending spree.
– Utilize automatic transfers into savings accounts.
– Apply for your employer’s retirement savings plan.
Saving money is essential, but it is not easy. There are many reasons and many dangers of not saving money. If you are still wondering, “why can’t I save money” reread the tips.
From this article, you have got various methods to try if you’re having trouble saving money. We hope the article will be helpful in your personal finance.