Last Updated on February 21, 2025
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Why Is It So Hard to Save Money These Days
If you’re like most people out there, saving money is hard for you. There are so many things you constantly need to buy. Imagine if you also have loans. And bills can cost a lot. You also want to have fun every now and then. That costs money, too. No wonder you can’t save any money by the end of the month!
Why is it so hard to save money these days? Many people ask themselves this question. They often blame it on their low wages or current inflation.
It is easy to find an external cause for the problem, but this won’t help. You won’t change the economy no matter how much you want to. The solution is to look at what you can do to help yourself. If you feel this way, it’s time to learn how to budget and save money.
Why Is It Hard to Save Money When on a Limited Budget?
Let’s start by tackling a misconception. Saving money depends on your will and commitment. It is not a matter of how much you earn. It is a matter of how much you can refrain from spending.
Saving money is a habit you can build. You just need to have the motivation. Many people might have big salaries, but earning a lot doesn’t mean you also save a lot.
Conversely, a modest income doesn’t mean you can’t save. Even if you only put $60 per month in a separate savings account, it’s still saving. At the end of the year, you’ll have $720 in that account. In ten years, this will turn into $7,200.
If you can’t save money, the first problem you should address is the mental aspect. Focus only on the good feeling you’d have if you had what you want in 10 or 20 years. Keep this focus and you’ll gradually feel the need to set up a savings plan that will get you there.
Saving a little could motivate you to save even more. Saving money is like earning money. The more you manage to save and invest, the more you’ll want to do it, if you can get your mind right.
Common Mistakes Preventing You from Saving Money
Here is a quick list of financial mistakes people often make. Do you do any of these?
Figuring out how and where you spend that goes counter to your values helps you pinpoint the root of the problem.
Common root issues include:
1. Never tracking your spending
If you don’t track your spending, how can you know where your money goes? Your spending might seem reasonable and bills are things you must pay. There are essential expenses you can’t neglect, like groceries, rent, gas, but how about non-essentials? Have you ever tracked them? How much do you spend on clothes, for example? What about eating out or having coffee at the café?
Try to track these expenses at least for a month or two. The results might be surprising. You may discover you spend hundreds of dollars per year on takeout coffee alone. That expense is not a must. You can make coffee at home and still enjoy it warm at work thanks to a thermos. You would save some bucks each day by changing this habit.
What if you apply the same approach to all your expenses? One of the golden rules of saving more money is to reduce your expenses. You can do this by starting small.
Think of the minor habits that drain your budget. After you change these, move further. You can end up saving thousands of dollars per year. Think of vacations, entertainment, or other activities that take a good share of your budget. Tailor them to a limited budget, and your savings account will grow.
2. Promising yourself you’ll start saving money next (week, month, year)
Procrastination is a difficult foe. If you often wonder, why you can’t save money, procrastination might be the answer. You want to save money, but constantly postpone the moment to start doing it.
Here is a simple trick to get you started. Use physical cash when you go shopping for groceries. By the way, this is an excellent way to spend less. If you only have a limited number of banknotes in your pocket, commit to only spend those. If you have a credit card on you, the temptation to spend more than is reasonable is often very high.
With cash in your wallet, buy whatever it is that you need. You will probably get small banknotes or coins as change. When you get home, put the change in a jar. Do this every time you buy something with cash.
Don’t leave the change in your wallet because you risk spending it next time. Set a threshold. For example, always put change in the jar that amounts to less than $10. In a few weeks, you’ll see the money grow in the jar. This will motivate you to continue pursuing your savings goals. Instead of saving the change in a jar, you’ll be ready to open a savings account.
3. You rarely check your balance before shopping
Tracking your spending is important to understand where your hard-earned money goes. Make a habit to check your spending every week. That is easy if you use internet banking. You can log into your checking or savings account in seconds. The first thing you will see is your available balance. Another easy way to do this is by using budgeting apps.
These applications will also help you set financial goals. For example, you can keep track of your balance using apps like YNAB. That way, you’ll know it’s time to slow down your spending.
Budgeting apps such as Mvelopes can also help you create envelopes or different accounts. There, you can transfer funds for separate goals such as savings or rent. Keeping your finances separate according to different goals helps you stick to a budget. Some of the apps you might want to consider to budget easier are
You can rely on these to apply different budgeting methods.
4. You buy things you don’t need
Impulse buying is one of the reasons why people can’t save money. Americans spend over $5,000 a year on impulse buys. It’s hard not to fall into temptation these days. Wherever you go shopping, you see things you like. You also see lots of ads all the time. These influence your buying behavior without realizing it.
In addition to all these, you see lots of discounts. These give you the impression you save money, but you might be wasting it. Not because the products are not good, but because you buy them when you don’t need them. In conclusion, you waste money you could be saving.
Impulse buying is hard to tackle, especially in the case of promotions. That is when the fear of missing out (FOMO) kicks in, which can contribute to you buying things on an impulse basis. You may do it under the impression that it’s now or never, but any non-essential expense can always wait.
Nothing happens if you don’t buy that pair of jeans on sale. If you don’t get that new laptop with a 10% discount, it’s ok. Your old one works well. You can still rely on it for a couple of years. Try to apply the following approach when shopping. Ask yourself if you really need that product. The answer might be “no”.
Another tip to help you avoid frivolous shopping is the 30-day challenge. It will teach you a lot about budgeting. This method involves sticking only to essential expenses for 30 days. These include everything you must spend money on
- Rent
- Bills
- Grocery
- Gas
- Insurance
All the other expenses (e.g., clothes, vacations, etc.) are non-essential. Determine the amount you can save per month by only buying essential things. The following month, you will be ready to start applying a budgeting plan.
How to Save Money by Budgeting
Tracking your spending is one way. It allows you to see what habits cost you more money. But after you realize this, it’s time to budget. Budgeting involves three simple steps
- Calculate your monthly income.
- Calculate your monthly expenses.
- Allocate a fixed budget to your expenses. Don’t go beyond that budget.
Here are a few popular budgeting strategies that can inspire you. Although different, they all aim to help you save money.
The 50-30-20 budget
This method asks you to divide your income into three. Each category will take a fixed share from your monthly budget. Here is how the plan looks:
Spending category | Share of your budget |
Essential spending (food, rent, gas) | 50% |
Non-essential spending (clothes, eating out, gym membership) | 30% |
Savings | 20% |
The digital envelopes system
Digital envelopes are separate bank accounts. Use them for different financial goals. A separate account should be dedicated to savings. The purpose is to allocate a fixed amount of money to each account every month. Afterward, avoid spending more than what’s in that account. When you get your paycheck, refill the envelopes with the same fixed amounts.
The half-payment method
This is a strategy that helps you pay your bills. You can use it for utilities, for example. From each paycheck, you put aside half of your bills’ value. At the end of each month, you’ll have the full amount. You don’t risk any penalties. You can even pay recurring debts and fix your credit fast with this method.
The pay yourself first strategy
This method emphasizes savings. It recommends you pay yourself before anything else. What you basically do is put money aside in a savings account. You do this right after you get your salary. Then, you can focus on all the other expenses. Automatically transfer money into your savings account. This way, you’ll make sure you don’t postpone it.
The value-based budgeting method
This is a flexible strategy that allows you to establish your priorities. Like the rest of the strategies, it involves different expense categories. You can start with essential ones. Then, you continue the list with non-essential expenses that have value for you.
This budgeting method allows you to give priority to whichever category you want. Just make sure you always have enough money for necessities first. The rest can go towards savings, entertainment, food, or whatever has more value for you.
Frequently Asked Questions (FAQs)
Why is it so hard to save money today?
We live in a consumerist society that urges you to spend money. That is why it is hard to stick to a savings goal when you see so many temptations in every store. Yet, with commitment and a reliable budgeting strategy, you can do it.
You can save money each month. Start small. Save $50 for three months in a row. Then, double that amount for the following three months. Try to save more money, especially if your income grows.
What habits should I change to start saving money?
It all depends on what expensive habits you currently have. If you spend a lot eating out, try to reduce these expenses. Cook your own meals more often. If you spend a lot going out with friends, invite them over. You can socialize at home and spend less money. Other expenses you might want to analyze and reduce to start saving money include
- Entertainment
- Subscriptions
- Clothing
- Vacations
How much money should I save each month?
It depends on how much you earn. It also depends a lot on your monthly expenses. If you have a large loan, you may not be able to save a lot, but try to save something every month. Ideally, you would put aside 10-20% of your salary.
Sources:
Center, F. F. (n.d.). U.S. inflation rate forecast. Retrieved July 20, 2022, from https://www.forecasts.org/inflation.htm
The FOMO effect in marketing. PushPushGo. (2021, December 9). Retrieved July 20, 2022, from https://pushpushgo.com/en/blog/the-fomo-effect-in-marketing/
Gaille, B. (2017, May 24). 19 dramatic impulse buying statistics. BrandonGaille.com. Retrieved July 20, 2022, from https://brandongaille.com/18-dramatic-impulse-buying-statistics/#:~:text=1%20A%202011%20study%20showed%20that%206%20out,of%20it%20being%20a%20useful%20or%20necessary%20item.
Steingold, D. (2022, March 31). Shopping addiction? Americans blow $5,400 per year on impulse buys. Study Finds. Retrieved July 22, 2022, from https://www.studyfinds.org/impulse-buys-shopping-money/