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I Can’t Save Money (How to Fix Common Reasons for Not Saving Money)

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I can't save money, because how can I save money with no money? Click to find common reasons for not saving money, plus how to fix them.

Do you feel like it's impossible to save money? Like I can't save money to save my life?

couple looking over their finances with calculator and papers, text overlay "feeling like you can't save money to save your life? common reasons for not saving money"

Your paycheck comes in. And let’s be honest…sometimes it barely makes a blip on the radar because of all the bills chasing after it.

  • Fill up the gas tank. check!
  • Auto insurance. check!
  • Credit card payment from spillover spending last month. check!
  • Groceries for a week, maybe 1.5 weeks this time. check!
  • Pumpkin spiced latte. check!

And…it’s gone.

Just like Downton Abbey <*sigh*>.

Maybe next paycheck will be different, you think. Maybe next paycheck, I’ll have a little extra to set aside for <insert whatever it is that you desire to save for>.

Except that it doesn’t happen, again.

Okay, you think. Next month will be different! Next month I will definitely, without question, put aside at least $50 for that emergency savings fund.

Well…I don’t have to tell you how that typically turns out. Your savings account balance can.

And it turns out…there are some serious consequences to not saving money.

Consequences of Not Saving Money

Before we dive head-first into why you're not saving money, let's look at why you SHOULD be saving money.

I've detailed the benefits of saving money here.

So for the purposes of this article, I'll briefly list out some consequences you can experience if you fail to save money (most of these I don't have to tell you, you've likely experienced them):

  • Having to periodically ask friends/family/parents for money
  • Having to rely on the government for retirement (social security)
  • Having to look for work immediately if you get laid off or fired, because you simply have no extra money to spend
  • Having to live with the stress of what next thing is going to happen to derail your life (financial stress is no joke, guys)
  • Never getting to experience a trip having already paid for it; instead, having to come home to regular life AS WELL AS work to pay off your good time
  • Having to pay gobs in interest over your lifetime, since you'll likely have to charge up a credit card to pay for the unexpected (instead of relying on your emergency fund)
  • Never getting a taste of how being financially independent feels

Not so pretty, right? I could go on, but I'll end it there.

Because I really want us to dive into why you're not currently saving money, and what you can do about it.

Why Am I Not Saving Money?

Saving money is hard, and not just for you.

According to a GoBankingRates survey, 69% of Americans have less than $1,000 in a savings account. And a full 21% of Americans simply save nothing from their income, at all.

But you know what? It doesn't have to be.

Still, if a) you've never done it before, and b) you aren't making a lot of money to begin with, then it probably seems hopeless.

It's not — I promise.

You're actually talking to someone who prides herself on being able to get others to save MUCH more money than they ever thought possible (in fact, I call it “saving beyond your means” — because I want people to save beyond their means, not spend beyond their means).

First up? We have to talk about common reasons for not saving money.

Reasons for Not Saving Money

You would think that there are only two reasons why it's sometimes difficult to save money:

  1. You don't make enough money to save money.
  2. You spend too much money to save money.

But guess what? There are at least six reasons why it's hard to save money.

Let's tackle this issue further, because once you see some of these reasons, you're going to get clarity not only around your own situation with struggling to save money, but around how to FIX it.

Reason #1: You Don't Earn Enough Money

How can I save money when I barely make anything?

I hesitated to make this my first reason for why people don't save money, because I don't want someone who DOES earn enough to use it as an excuse.

However, I get asked this question pretty regularly, and I do believe that this is the case for a small percentage of people.

How can you figure out if this is you?

Write down your bare-necessities budget for one month, and then compare that with your monthly take-home pay.

Hint: Take the “bare necessities” seriously — things like your housing costs, childcare costs so that you can work, food, utilities, and other necessities count. Fast food drive-thrus and vacations, even ones you really, really, really earned, do not.

Are your monthly expenses less or more than you earn each month? If your absolute necessities are more than you earn, then you've got a problem (skip to Reason #4 below for help).

If it's less than what you earn? Move onto the next reason.

Trying to save money with no money? Definitely check out my articles on living paycheck to paycheck stories, 17 simple tips to stop living paycheck to paycheck and how I stopped living paycheck to paycheck and saved my first $1,000.

Reason #2: You're Experiencing Lifestyle Inflation

Generally speaking, your income and mine increases over our lifetime. As we gain more knowledge, more expertise, and more experience in learning how to earn money, our income *should* rise (averaged over the years).

This means that saving money should be EASIER to do as we age, not harder.

But, if your extra money you're earning is being put into upgrading your lifestyle? Well, then saving money might actually get HARDER to do.

For example, if you use a raise as an excuse to go out and lease a new, better car, then you likely have absorbed that extra few hundred dollars per month in a new expense.

Did you use your bonus to go on a vacation one year, instead of putting at least 50% of it in your savings or investment accounts?

Some lifestyle upgrades are nice, and warranted. But many don't actually bring us any extra happiness. Instead, you could use that extra money to increase your savings account, which will bring you added security and the ability to start to design your life.

And those two things CAN you bring you happiness (and peace).

Reason #3: Saving Money is Not a Priority for You

I want you to take this section seriously.

Because honestly, most people will SAY that saving money is a priority, but they either don't know what making it a priority really looks like, or they're not being honest with themselves about why they can't save money.

Let me show you what it looks like to make saving money a priority.

People who prioritize saving money: 

  • Set up automatic withdrawals from their checking account to saving account each month (and sometimes they do this as a direct deposit from their paycheck!)
  • Routinely audit various bills and fixed expenses — like property taxes, health insurance premiums, and cable — in order to pay less so that they can save more money in their bank account
  • Cut expenses to the bone so that they can find more money to send to savings
  • Experience savings inflation instead of lifestyle inflation, meaning that as their income increases over the years, they save even MORE money (instead of spending that money to upgrade their life, leaving their savings rate flat)
  • Routinely set aside 50% or more of any tax refunds they receive to put into savings

Now…can you tell me that you are truly making the effort to prioritize saving money in your life?

If the answer is yes, then don't worry — I've got more fixes for you. If the answer is No? Well, it's time to re-calibrate your priorities.

Psst: you'll want to check out these 7 tips to help you find and keep motivation to save money.

Reason #4: You're Not Aware of Savings Programs Out there

If your income is just too low — meaning your basic living expenses cannot be covered by your paychecks — then you need to know about resources out there to help you with saving money.

Now, hear me out: I said BASIC living expenses. If you are leasing a new car every two or three years, or your wardrobe includes more than 4-5 pairs of shoes, or your Facebook feed is full of vacation photos AND you can't save any money?

Well, it's not an income problem — it's a priorities problem (see Reason #3 above).

I've detailed 4 types of Savings Match Programs you might qualify for that can help you save money despite a low income.

Savings Match Programs include:

  • Individual Development Accounts (IDAs)
  • Private savings match programs
  • IRS tax incentives for saving money
  • Employer-matched savings programs

Any of these could make the difference between being able to save money each month, and finding saving money too hard to do.

Reason #5: You're in an Expensive Season of Life

I get it – I became a mother over 5 years ago. If you're building your family, or building a business, or any other number of things, then you are in an “expensive” season of life.

I don't say that to make excuses; these aren't good enough reasons to not save money. But it does need to be addressed.

I know firsthand how much our own expenses have increased with just one baby — with our hybrid childcare approach, upcoming preschool payments, increased spending on food, the formula we had to buy since I couldn't breastfeed, the higher health insurance premiums, the doctor bills…I could on.

Imagine if you have a large family (you'll definitely want to check out my article on 16 money saving tips for large families).

But you probably understand all that firsthand, yourself.

Reason #6: You're Riding the Money-Saving Train Alone

Listen — lots of couples aren't on the same financial page. In fact, it's pretty common to get a “saver” in a partnership with a “spender”.

You need to learn how to work together so that you're not constantly working against each other, and getting nowhere towards meeting your savings goals.

Start getting on the saving money-saving train (and money page, in general) with your partner by using one of these couple's budgeting apps.

Follow that up with a marriage financial planning date night.

No Matter How Hard I Try, I Can't Save Money

It's one thing to learn about common reasons why people don't save. It's another to identify your own, personal ones for keeping your savings account so low.

If you find it hard to save money, then you're likely sabotaging your efforts to save money.

Consciously, or on autopilot (you'll want to check out this extensive list of spending habits for more info on getting your spending in check).

Let me outline the biggest savings sabotages out there, plus steps you can take to solve the problem.

Savings Sabotage #1: Failing to Deposit Money into Your Savings

Sometimes, you actually have money leftover. But for whatever reason, you're not in the habit of depositing that money into your savings account.

And you know what happens then?

It gets “eaten” or otherwise absorbed by what I like to call the checking account gremlin.

In other words, it gets spent.

Fix this: Get into the habit of sweeping extra money you have out of your easy-to-spend-from checking account, and into your savings account.

Savings Sabotage #2: Not Setting a Savings Goal

When you don't have a reason to keep your money around – a savings goal – then you're much more likely to spend it away.

In fact, you might just start to wonder what's the point of saving money at all?

Fix This: Set at least one savings goal for your money. Could be a short-term, a medium-term, or a long-term one. Just give your money a reason to stick around. Not only that, but set up a separate savings space for the money you'll accumulate – outside of your checking account, and outside of your emergency savings fund.

Savings Sabotage #3: Believing the “Savings” at the End of Your Receipt

There are signs everywhere that show you how much money you are “saving”.

Like at the at the bottom of your grocery receipt, on the bottom of your CVS or Walgreens receipt…I've even been told how much money I saved while buying a stick of gum at the convenience store.

But where exactly are these “savings” at?

In your pocket, or in your savings account? No.

This type of “saving money” that marketers love to tell you you're doing is not adding anything to your savings account. It only does that if you physically move money into savings.

Fix this: I challenge you to do something that I tried several years ago (and yes, it worked). Bank it instead. Every time you are notified of how you just “saved” money, make it tangible. Take that exact dollar amount and transfer it from your checking account to your savings account.

Savings Sabotage #4: Not Saving Money During the Good Times

We all go through good times, when money is abundant, and worse times, when money seems like it's hiding from us.

The biggest mistake I see people make over and over and over again is to fail to set aside any money during the good times, when they're more flush with cash, to both:

  • Make up for not being able to save during the bad times
  • Help the bad times, by having a sizable savings to back you up

Fix this: The next time you're feeling a bit flush with cash, instead of buying extra things or inflating your lifestyle, inflate your savings. You will thank yourself later.

How Can I Force Myself to Save Money?

Yes – there are ways to force yourself to save money.

1. Set Up Direct Deposit with Your HR Department

Did you know that many companies let you split direct deposits into two different accounts?

I was so pleasantly surprised to find this out at my old employer.

Go ahead and set up an amount to automatically hit your savings account (and the rest to go to your checking) each month, and see how much your savings can grow.

2. Save the Change Round-Up Apps

Some banks offer round-up apps that automatically round up your spending dollar amount to the next dollar, and put the extra change directly into your savings account.

Pretty sweet deal!

3. Sign Up for a Savings App

One of the ones I'd like to talk about is a really cool savings money app that does the work for you.

You see, last year I decided to do something about Christmas time.

All year long, I thought about how nice it would be to set aside $50/month or so to spend on holiday gifts + travel to PA to spend the holidays with family.

Yet each month slipped by, and nothing got done about it.

About mid-year, I happened to sign up for this new service that promised to send increments of savings into an account automatically, based on an algorithm that looks at my checking account and determines how much I can afford to save.

I was intrigued, if not excited by the possibilities (with a twinge of nervousness at giving up some control). So, I did it.

I didn’t check the account for three months. But when I did, WOW was I in for a Christmas miracle – $509.97 sitting in an account, all to spend on the holiday season.

Did I mention I didn’t have to lift a finger (after signing up for Digit) to make this happen?

It was cool.

SO cool, in fact, that I continued it all this year. Instead of designating it to my “one category” of holiday spending, I decided that travel had become the ONE category that we want, want, want, but never seem to set money aside to get.

After letting this little guy do its automated work over the past 11 months, I can happily say we’ve accumulated $1,352.86!

That’s not retirement-savings-turned-travel-savings, and it’s not money I’ll have to transfer out of our emergency fund into our travel fund…that’s money free-and-clear that I can use towards an awesome trip for our family.

Without Digit automatically taking little withdrawals here and there throughout the months – $11.92 here, $27.96 there – then that money might otherwise just have been spent.

  • You sign up for an account. It’s free for 100 days, then just $2.99/month thereafter. Plus, you earn a small percentage of interest on your money (1%) after saving with Digit for 3 months. Not bad considering most bank savings account interest rates are hovering around 0.75%.
  • Connect your Checking Account with them (they have 128-bit bank-level security + they do not store your bank login information).
  • Digit analyzes your spending needs automatically using some sort of fancy schmancy algorithm…then they determine how much you can save. They do this every day.
  • They start to deduct small, odd-amounts of money from your account, such as $8.68, and $26.44. With their no-overdraft guarantee, you don’t have to worry about them making your account go into overdraft and being stiffed with a bank fee. And if you’re unhappy with the amounts being taken out, you can text them commands like “save less”, or “save more”.
  • Funds are stored in a Digit savings account, which is FDIC insured up to $250,000, just like at a normal bank.

How to Save Your Money and Not Spend It

Still trying to figure out how to save your money and not spend it?

I want to show you one more thing.

The power of daily spending decisions that can make or break your savings account.

By my late 20s, I had saved up a down payment for our home.

This was a huge accomplishment!

I decided to go back through and figure out where exactly that money COULD HAVE gone had I spent it, and the daily frugal savings habits I used instead to keep it for myself.

So, where could all of this money have gone to instead of in my savings account? I have gathered some thoughts and calculations on this topic for common things people spend their money on. This includes categories that, if I had my way and a limitless bank account, I might have spent my money on as well. Here is what I found:

ItemCostFour-Year Cost
Lattes During the Workweek (200 days a year)$2.00 per day$1,600
Membership Dues to a Gym$40 per month$1,920
Weekly Manicures$20$4,160
Car Lease (for this example, the popular Honda Accord Ex at $24,495)$239 per month, 36 month lease$8,604 (and I would not own the car at the end of the three years)
Pay Off Credit Card Debt (average for household is $8,000 @ 14.94% interest)$219.67 per month$8,000 paid off (hurrah!)$2,544 lost to interest (bummer!)
  $18,828

Perhaps it seems to you that your everyday purchases, habits, and financial commitments do not add up to anything.

But in the example above, “typical” spending adds up to $18,828 in just four years (not including the credit card debt you paid off—which is great, but does not equal money in your savings).

Here's what I did instead to still get what I wanted, but without spending nearly as much for it (allowing me to grow my savings):

  • Instead of the daily lattes, I went to Starbucks once every other week to write and enjoy a delicious treat, which was $1,392 cheaper
  • Instead of working out at a gym, I signed up for periodic yoga classes and ran/walked outside, which was $1,440 cheaper
  • Instead of weekly manicures, I did my own at home, and went to the salon for a manicure and pedicure twice per year, which is $3,600 cheaper
  • Instead of leasing  a car, I paid cash for mine ($1500) and have driven it to 227,000 miles thus far, which is $7,104 cheaper (plus I own the car)
  • Instead of having credit card debt, I paid off my credit card each month (I have gotten away with only one $39 finance charge due to changing banks and not changing the automatic withdrawal), which was $2,505 cheaper than the average household credit card debt (also I have earned over $800 in gift cards for reward points from this credit card)

I could look at my account today and sigh at all of the dinners out, new car smells, trips to Bermuda, and clothes that I have missed out on over the last four years. But I don’t see it that way at all. I am alive, I am well, and I have a down payment waiting for the house of my dreams.

To not have this down payment would be the true sacrifice, in my mind.

Is it Easy to Save Money? Not Always

The next time you think “I can't save money”, keep these sabotages and problem solvers in mind. Not only can you change your spending habits, but you can also get better at actually hitting “send” on a transfer of money from your checking to savings (you can do this!).

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Amanda L. Grossman is a Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 10 years, her money work helping people with how to save money and how to manage money has been featured in Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here.

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