Have you ever asked, “Why can’t I save money?” and found yourself wondering about the reasons why? Most of us have been there. In fact, less than 40% of American adults have enough savings to cover a $1,000 emergency. The concept of saving is simple, but the actual act can be hard for some. If you can’t save money, it’s important to assess and realize why you aren’t able to save.
So don't get stuck in the "I can't save money" mindset! Use this list to figure out what your pain points are and how to combat them so you can start saving!
10 Reasons why you can’t save money
To be able to save money and do it consistently, you have to take control of your finances. Once you determine why, you can implement changes and start saving. Let's dive into the reasons for your burning question "Why can't I save money?"
1. You don’t have a budget
A big reason why you can’t save money is that you don’t have a plan for your money. Don't feel bad, I can't save money either if I don't budget. Without a budget, it is difficult to keep track of your money.
You are able to manage your money better when you know where it is going. Budgeting makes it easy to see your income in relation to your expenses and to determine how much you are able to save. Having a budget also allows you to see where you can cut back on spending and save instead.
To switch from passively expending money to actively managing your finances, create a budget that fits your needs. Make a list of all of your income and expenses and the amounts of each.
Don’t forget to include savings in your budget as well. Creating a plan for your money puts you in control and is an important step in being able to save money consistently.
2. You can't save money because you have a lot of debt
Making payments towards debt takes away from the amount of money that you are able to save. Whether your debt is due to necessity or a bad decision, repayment ties up your income and is a reason why you can’t save money.
Often we get into a cycle of debt that makes saving even more difficult. You’re paying off debt instead of saving. So when an expense comes up, you have to take on more debt to cover that expense because you don’t have the savings for it.
Taking on more debt means more payments, and so this cycle repeats itself. Since you have to make these payments, use your budget to figure out where you can make cuts so that you are able to afford to pay off your debt and save.
3. You’re living beyond your means
When your expenses outweigh your income, it is impossible to save. You can’t save money because you’re spending more than you’re bringing in, and you don’t have anything available to save. It is very easy to spend more than you can afford when you have credit cards and treat them like cash or income.
Making purchases that stretch the limits of what you can afford doesn’t seem too bad when you can’t see the cash leaving your hands or your bank account.
There are many areas where you can change your habits and cut back on your expenses. Your housing costs may be too high for what you can comfortably afford. Maybe you’re eating out too often or overspending on shopping.
Looking through your bank and credit card statements will help you determine areas where you’re overspending. Giving yourself a spending limit via your budget curbs your spending and will hopefully prevent overspending. You can’t save money while spending more than you’re bringing in and living beyond your means.
4. You don’t earn enough money
So far we’ve talked a lot about finding areas where you can cut back and save money. But you may be thinking "I can't save money because I don't make enough."
It is true that you can only do so much in terms of cutting expenses. If you’ve cut back to your basic, barebones expenses and you still can’t save money, then it’s time to increase your income.
You can increase your income by negotiating a raise, starting a side hustle, creating streams of passive income, or moving to a job that comes along with a pay increase. Being in a position where you outearn your living expenses will make it easier for you to begin saving money consistently.
5. You can't save money because saving is not a priority
If you aren’t where you want to be financially, then you may think that you should put off saving until you’re in a better situation or making more money. You can’t save money because you haven’t built the habit and saving isn’t a priority.
Saving something, even if it’s a small amount, builds the muscle so that the habit will already be formed when your financial situation does improve. Plus, small amounts add up, and having that money stashed away is better than not having anything saved at all!
When creating your budget, treat savings as an expense that you have to pay. Make saving a priority by treating it like a payment that you can’t skip and including it in your budget. No matter how big or small the amount.
6. You don’t have a savings goal
You can’t save money because you don’t have a specific goal to work towards. Having a goal, and something concrete that your savings will go towards, gives you a starting point for making a plan to reach that goal.
It also makes it easy to see that small amounts do add up. Being able to track your progress and see yourself getting closer to reaching your goal serves as motivation and encouragement.
Come up with a specific number that you want to save and a deadline for reaching that amount. If you have a specific need or purchase that you’re saving for and can tie to this goal, that’s even better!
From there, break your goal down into smaller steps and plan out how much you need to save from each paycheck to achieve your goal by the deadline. Be sure to track your progress to see if you’re on target to hit your goal.
7. You can't save money because you don’t have an emergency fund
“Unexpected” expenses are inevitable. If you aren’t prepared for them, they will eat up any money that you planned to save.
Or you’ll end up charging the expense(s) to a credit card and taking on more debt, throwing you into the debt cycle mentioned earlier. An emergency fund will keep you from falling off track when something unexpected pops up.
If you are wondering why you can’t save money, it may be because you don’t have a safety net to cover expenses that you know will come eventually. Having emergency savings in place for these situations makes it easier to save money for other reasons.
It is recommended that you have at least 3 to 6 months' worth of your expenses saved in case of emergency. But even if you don’t have 3 to 6 months saved up yet, it’s still a good idea to set aside some money to help offset emergencies. Make it a goal to save your first $1,000 and build from there.
8. You’re paying for subscriptions that you don’t use
Subscription services are great if you find value in and actually use them. They’re not so great if you’ve signed up for them, forgotten about, or don’t use them, and you’re wasting money that you could be saving each month. When you can’t save money and you need to be able to do so quickly, this is one of the easiest things that you can modify.
Go through your bank account and/or credit card statements and make a list of all the subscriptions that you’re paying for. Cancel all of the subscriptions for things that you no longer find value in and things that you may not have even realized that you are still paying for.
Depending on how many subscription services you have, this has the potential to save you a nice chunk of money. Services like Truebill will handle this process for you, and even negotiate some of your other bills to find more savings.
9. You’re an impulse shopper
Another reason why you can’t save money is that you spend on things that you don’t really want or need. Treating yourself is nice, but excessive impulse spending is taking away from money that you could be saving. Especially if you’re purchasing things that you don’t need and they just end up collecting dust.
When you feel like making a purchase, take some time to think about it before spending impulsively. Give yourself a day or two to think it over and determine if you really want to make the purchase. Mistaking wants for needs is a common issue, and when having trouble saving, this is a great area to begin cutting back.
10. You aren’t paying yourself first
If you find yourself asking, "Why can't I save money" but aren't paying yourself first, then that's a big reason why you can't save. Saving money first before spending is a cheat code to being able to increase your savings consistently.
Often, saving is left for last, and you end up only saving what is left over after expenses and spending. Paying yourself first prevents this. Setting aside savings before anything else ensures that you don’t spend all of the money that is available.
Once you’ve created your budget, you will know exactly how much money is needed to cover your expenses. After making sure your expenses are covered, you can determine how much you can afford to save. When you receive income, set aside your savings first! Rather than spending first and then saving what’s left, save first and then spend what’s left.
Change your habits and start saving now!
Hopefully, you’ve recognized some reasons why you can’t save money and discovered tips for how to start saving consistently. Although a simple concept, the application, and act of saving, can be difficult.
Recognize and assess why you can’t save money, use these tips to change your habits, and start saving money today!