Why Can't I Save Money?

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Ask a financial expert for their best money management tip and you will most often hear – save, save, save. But sometimes saving money each month can be a struggle.

The rule of thumb is to at least have an emergency savings fund; this could be anywhere from 3 to 9 months of monthly expenses. And, you should actually be saving around 20% of your income each month.

The trouble is that, for millions of people, saving money is immensely difficult.

According to the 2021 Emergency Savings survey conducted by Bankrate, 25% of Americans have no money at all saved for emergencies.

So the question is, why can’t you save money?

Why Can't I Save Money? — There can be many reasons saving money is hard

Why saving money can be a challenge

Like many people, who live paycheck-to-paycheck with no money left over after expenses, it stands to reason that they are not able to put money aside.

The good news is that there are reasons why you cannot save money. How is this good news? If there are reasons for your problems with saving money, there are solutions to them too!

Before we get to the problems the average person encounters when thinking about saving money, let’s look at some of the consequences of not being able to save.

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Why is saving money necessary and what happens if you don’t?

Saving money is the first fundamental step towards financial independence.

Not everyone earns a fat paycheck so finding your way to financial security takes a lot of hard work and discipline.

For the normal person on the street with a regular job, the one sure path to financial freedom is to spend less than you earn so you can put money aside.

The consequences of not saving money can be punishing to the quality of life you live. Without the safety net of a savings fund, staying out of debt becomes nearly impossible.

No emergency funds mean you are unprepared for expenses that come at you out of the blue.

What usually happens with these types of financial emergencies is, you rely on credit and borrowed funds to pay for them – funds that you will have to find the means to repay. This extra financial burden eats away at your peace of mind

And debt is a financial future killer.

In addition to always being burdened by financial stress, another soul-destroying consequence of not saving is that you are completely dependent on earning an income to support yourself.

Unless you find a way to begin a savings fund, you will have to work well into your later years.

Another benefit of saving money is that you can actually use it to make more money. As your savings grows, you may have enough to invest in real estate, or start a side business.

You can also park your savings in a high yield savings account like CIT Bank offers and make money in interest alone.

Understanding why it is you can’t save money will help you find ways to overcome your challenges.

Here’s a look at some of the most common barriers to saving money and ways to overcome them.

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figuring out the reasons you can't save money will help you start — Help yourself save money by identifying the reasons why you can’t

6 Money-saving challenges and how to overcome them

If you are earning enough money to meet your expenses but still aren’t able to save money. The following reasons could be why.

1. You may be spending money needlessly

One of the reasons why you can’t save money is that you are not tracking your expenditures.

Without knowing what you are spending your money on and how much you are spending, it is quite easy to spend more money than you actually have available.

Plus, tracking every dollar you spend will help you find new ways to save money.

How to solve this

An easy way to track your spending is with a budgeting app that allows you to include all your transactions.

If you don’t want to use an app or software, you can just download a budget planner sheet and do it yourself. Here are 21 free budget printable templates to choose from.

You will need to review your transactions on a weekly, bi-weekly or monthly basis to find out what you are spending your money on.

This may take some effort at first but the payoffs are worth it. Once you know where the problems are, you can then find suitable ways to fix them.

Here are some thrifty living tips to help you reduce your spend.

2. You spend money too frequently

It only stands to reason that the more often you spend money the more likely it is that you will overspend.

It is surprising how many people spend a little more than they planned when shopping.

The amount may be as insignificant as a dollar or two here and there but if you do this every time you shop, and you shop often, it can add up.

Spending too often and too much may be one reason why you have no money left over to save.

And, for many people they are spending so much they are not living below their means, but above them.

How to solve this

Count how many times you spend money in a day. Add up every purchase, even the minor ones like a cup of coffee or bar of chocolate or a tank of gas.

Include purchases made with cash, card and any other payment method. You could find that you are out of money sooner than expected is due to how often you spend it and to overspending.

Try these tips to stop overspending.

make money — You may struggle to save money because your expenses are too high

3. Your fixed expenses are too high

Are you paying more than you can afford to for your home or car?

Spending the majority of your earnings on rent or transport leaves you very little for other expenses and even less for unexpected emergencies or a savings account.

One reason you can’t save money may simply be that your lifestyle is too expensive compared to your income.

How to solve this

You could consider downsizing to a less expensive home or car.

This may be easier to do if you are renting but selling a home is a major decision to make.

Before this step, you could find ways to build up a three-month expenses buffer to minimize the risk of unforeseen eventualities.

Selling your car for a less expensive one, or renting out your extra bedroom can help you save money.

4. You are putting too much money into your retirement savings

Putting more money aside for your retirement than you need to could be the reason why you are not able to pay for day-to-day expenses or save towards an emergency fund.

You may also have credit card debt you have used to meet your day-to-day expenses.

How to solve this

The quick fix to this problem is to reduce the amount of money you put towards your retirement. This will leave you with a little more money for monthly expenses, paying off debt or placing into a savings account.

The alternative solution may require a bit more effort and discipline. You could look at how to reduce your day-to-day expenses to improve your cash flow.

5. You plan on saving but just not now

It is never too early to save but when you are young, this may not be a priority for you.

It may be more exciting to spend money on experience and luxuries but in the long run, getting into the habit of saving money will serve you better.

How to solve this

If you have extra cash to splash, the wise thing to do is to spend some of it and save the rest.

You could still indulge in more expensive treats, just delay instant gratification by saving towards these treats.

You can also help yourself save by making the process automated. My favorite is the Acorns app. It rounds up the change whenever you use your debit card and deposits that into savings.

But, best of all, it actually invests that money for you. So not only is it building a savings account, but it is making money at the same time!

There are a lot of savings challenges out there like the 100 envelope challenge and the 365 day nickel challenge you can try as well.

And if you stay focused, you can use these tips to save as much as $5,000 in 6 months!

6. You don’t have a savings goal

It is difficult to save money if you don’t have a reason to or aren’t motivated to do so. You will find it is easy to spend money on unnecessary things if you don’t have a use for it.

How to solve this

Try to start off with a small savings goal over the short term.

Once you have succeeded at this you could move towards more long-term goals. You could also try adding more than one savings goal.

For example, you could save towards an emergency fund as well as set up a savings account for a deposit for your own home.

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How You Can Save $5,000 In Just Six Months

7. You Have Too Much Debt

One common reason that people can’t save money is because they are drowning in debt.

If you have a lot of debt, every month your money is going to pay that minimum payment, and that deadly interest charge.

It leaves nothing for your savings account, or for your future.

How to Solve this

If you are carrying a debt load, try moving debt to new cards with 0% APR so that each month the money you pay is actually decreasing the principle.

Or, consolidate all your debt into one, lower interest personal loa or HELOC loan even.

Take an extra part-time job or rent out a room in your house for a few months to make extra and put a dent in your debt.

The point is, do everything you can to get out of debt fast!

How to get into the saving Money mindset

For most people, spending money comes more naturally than saving it.

What separates the spenders from the savers is their money mindset.

Your mindset is your attitude or core beliefs about money. Fortunately, this mindset can be learned with the right motivation, commitment and tools.

Discover your money mindset

The first step toward making a change in your spending habits is to recognize the problem.

Do you identify more as a spender or saver? Knowing that your spendthrift ways are what is preventing you from saving money can help you find ways to be more conscientious when spending it.

Identify your financial values and goals

To create a new and positive money mindset, you will need to set out new financial values and goals and use them as reminders when you find yourself struggling.

Be clear about what your financial goals are.

It is also important to remember that you will struggle at first, change is never an easy path especially when you have spent a lifetime indulging in bad habits.

Monitor your spending

Keep a weekly money diary to help you keep track of your spending.

Note down your feelings before you spend money.

As important as it is to write down every time you spend money, for what and how much, it is also important to record your feelings.

How do you feel when you receive money or pay your debts? What are the triggers that compel you to spend?

Understanding and being aware of the psychology of spending can go a long ways towards helping you save money.

Commitment

Changing from a negative mindset to a positive one is a gradual process that takes commitment.

Use each small win as a stepping stone to bigger successes. Make commitment easy by using available technologies to remind you of your goals.

You could also be inspired by reading about the success stories of others.

With the internet available at your fingertips, there are countless websites, eBooks, videos, podcasts, courses and other resources to help you stay true to your new money mindset.

Embrace the positive

Staying positive about your progress and your goals can help you stay on track.

If you start cutting yourself down whenever you make a mistake, or think that you can’t get ahead, it will harm your progress..

Final takeaway

The only person that is in control of your financial situation is you. If you are wondering why you can’t save money, start with you!

Only you can make changes, and while saving money is difficult to do at first, it is possible to do.

You may not be able to save huge sums of money at first but starting off in small steps will keep you on track and soon you will be able to move on to bigger savings goals.

You can save money! Start today.