Why Can’t I Save Money? 7 Reasons (and How to Fix Them)

by Rob Bertman, CFA®, CFP® in Budgeting
January 30, 2022

Why can’t I save money? 7 Reasons (and How to Fix Them).

It’s hard to save money, especially when you have a family. 

Money and time both seem to shrink.

It can be really stressful to have that paycheck-to-paycheck feeling while also knowing that you’re behind where you should be.

I have found that there are 7 main reasons why saving money can be a challenge by working with clients and also through my personal experiences.

The good news is that each money saving challenge has a solution, and we’ll be sharing that below.

What happens if I can’t save money?

If you can’t save money, the consequences can be pretty dire like:

  • Going deep in debt and staying in debt.
  • Putting off retirement.
  • Having to stay in a job that you don’t like.
  • Never having money for emergencies
  • Missing out on financial or life opportunities.
  • Financial decisions are based on staying afloat rather than being strategic.
  • Not being able to financially help your community.
  • Marital stress and possible divorce.
  • Passing along money stress to kids that may stay with them for life.
  • Feeling guilty spending money on what you enjoy.

It’s no fun if you can’t save money. In fact, it can make life downright miserable.

So what are the main reasons you can’t save money and how do you get over the hump and finally find more money left over at the end of the month? 

Let’s dive in.

Why is it so difficult to save money? 7 Reasons and how to solve them.

Assuming you’re earning “enough” money to get by, there are 7 main reasons why saving money is a challenge.

You’re not tracking your spending

“What gets measured, gets managed.”Peter Drucker

If you’re having trouble saving money, chances are you’re not sure how much you’re spending and where your money is going.

Perhaps you’ve tried to budget. Most people think they should start there.

But, the key to a family budget that sticks is all about understanding what your expenses are before budgeting and figuring out the changes you can make.

How to fix the problem: Sign up for a budgeting app that will pull in all of your transactions. Then review your spending on a weekly basis to see where your money is going and how much you’re spending in total.

*If you could only focus on one thing in personal finance, it’s tracking your spending. Make the time to do this. You’ll go from dreading seeing where your money is going to feeling empowered to get there.

Spending too often – Death by 1,000 Cuts

Every time you spend money, it creates an opportunity to overspend.

Think about it. Have you ever left a store (online or in-person) buying only what you went there for? Of course not.

An extra $5 here and $40 there in the moment may not seem like much, but those little extras add up over time.

If you’re not sure why you can’t save at the end of the month even though your housing payment is reasonable, it’s little bits of money flowing out over and over again that could be causing the issue.

How to fix the problem: Start counting how often you spend during the day. 

Morning coffee? That’s 1. Fill up the car with gas, that’s 2. Order something online, that’s 3. Pay for an app or get something for your kids, that’s 4… If you end up at 5-10 per day, that’s your problem.

High fixed expenses – House or car poor

fixed expenses

Just one or two big financial decisions over a 5 or 10 year period can make it challenging to save money. 

Overspending on big ticket items like a car or house can make it really hard to have extra money at the end of the month.

You might think it’s easy to identify if you have high fixed expenses. But sometimes, your mind can play tricks on you. 

Sometimes it sounds more like, “We don’t really spend much and are very frugal but for some reason, we can’t save money.”

The problem with having high fixed expenses is that there is little margin for error. If something unexpected happens, it can easily lead to going into debt.

How to fix the problem: You might think it’s all about selling your house or car, but that can be a pretty drastic move.  The first step could be making sure that you have a cash cushion or emergency fund set up. 

Make getting 3 months expenses the primary of your savings goals. When you have money in your savings account, you can manage the unexpected without it putting you into debt.

Over-saving in your retirement plan

Over-saving might be the reason why you can’t save.

Yes, you read that right. 

I describe this as being “retirement plan poor”. 

What it means is that you are maxing out your retirement account at work but your take home pay isn’t enough to support your day-to-day expenses.

The good news? You probably have a good amount of money saved up for retirement.

The bad news? You probably have credit card debt alongside of it, because your monthly expenses are more than your take home pay.

How to fix the problem: There are 2 options to fix this problem. 

The first (and quick) fix is that you can decrease your retirement plan contributions so you have more to put towards your credit card debt. 

The second is that you can review your expenses and see where you can cut your spending to have your cash outflows be at or below your take home pay.

You’ve gotten used to just making it each month

You’ve become acclimated to ending the month with a certain dollar amount in your checking account. No matter what you do, it always seems to end up at that number.

I call this your financial thermostat.

Just like your home thermostat, you set it at a comfortable temperature. When it gets too hot, the A/C kicks on. When it gets too cold, the heat kicks in.

Similarly, you have a number in your bank account that you’ve gotten accustomed to.

When there’s money in the account, it burns a hole in your pocket. Conversely, when you’re getting close to that number or below it, you start to really pay attention to your spending and cut out everything so you make it.

How to fix the problem: Raise the dollar amount that’s acceptable to you. 

One of my clients once said after working together, “I got used to barely scraping by that last week of the month. Now I’m not comfortable if there’s no comma in my bank account balance.” (The comma means $1,000+).

Keep raising your expectations (aka thermostat) little by little, $1,000, 1 month expenses to 3 months of expenses.

Boring Goals – No motivation

What difference does it make if I get that extra drink? I can afford another $125 a month to get the nicer car. What difference will it make?

It’s easy to justify spending any amount of money in the moment unless you have clear and motivating goals.

Unless you figure out what you truly want your money to do for you, there is no trade-off of spending vs reaching your financial goals.

Now, I’m not talking about boring financial goals like saving for retirement or putting money away for kids’ college expenses.

I’m talking about real motivating goals that inspire you to take action to get there.

For example, I don’t want to retire in the traditional sense. 

I want to have enough money where my wife and I can pick up and sit in a city around the world for a month at a time while keeping our home base here in St Louis. A month in New York City, a beach town in Costa Rica, Tuscany, Tokyo, or really anywhere so we can absorb the culture.

That helps drive my day-to-day decision making as opposed to “saving for retirement”.

How to solve the problem: Get clear about your goals to the point where your heart starts beating faster and you know this is worth putting money aside. If you’re saving money has been a problem, this will motivate you to start saving.

Then figure out your first step to get there. It usually starts with making short-term financial goals to get your financial foundation in order so you can then clear away the obstacles that could stop you from getting there.

High debt payments

Debt is money you’ve spent but haven’t paid for yet. 

When you have high interest rate consumer debt like credit card debt or if you have things on the Buy Now, Pay Later plan, you’re playing catch up while also having to cover your day-to-day and month-to-month expenses.

If you’re not careful, you end up doing something I call Payment Stacking. It’s when you start to rack up monthly payments because they are “affordable” and possibly even 0%. Too many “affordable” payments end up being really unaffordable.

I’m not saying you should pay cash for everything. But be mindful that monthly payments are expensive items disguised as affordable.

How to solve the problem: Whenever you’re exploring financing something or taking on monthly payments, look at the total cost of the purchase. Then ask yourself, “If I could pay for this in full, would it be worth it.”

If you already have a bunch of debt payments, prioritizing paying them back is what you should do with extra money at the end of the month. Pay off debt, free up those monthly payments so you can redeploy that money to propelling your forward.

How to save more money

If you keep asking yourself, “Why can’t I save money?” just know that there are plenty of ways to get it done even if you feel like you’ve never been able to do it.

Learning how to save is a skillset that anyone can learn.

That is the sole purpose of Family Budget Expert, to help find extra money so you can make sure every $1 goes to it’s best use. 

The money you spend should be in alignment with your values and priorities as individuals, as a couple, and as a family. The extra money you free up can go toward productive places to help you reach your short and long-term financial goals.

Along with that, you can remove the financial obstacles and stress that are getting in the way of your otherwise thriving relationship.

I’d love to help you any way I can, so please set up your free 30 minute session with me so we can talk through how to get you saving money and getting to where you want to go.

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