COMMON REASONS WHY PEOPLE FIND IT HARD TO SAVE MONEY AND EASY SOLUTIONS TO THEM.

Having the discipline to consistently put money away for compounding purposes can be difficult for a lot of people. Money is one common denominator that connects everyone, we all need it and we all use it. Saving money encourages you to spend less and prudently set the difference aside, and its purpose is always for your benefit. However, saving remains an extremely difficult financial habit to carry out and stick to, and that is because, theoretically, saving is a solid concept, but its execution and practicality depend on numerous factors. Simply put, saving is easier said than done.

“So why can’t I save money?” Let’s see if the following sounds familiar. You’re earning money, you make plans for said money, you write down a list of expenses, all your needs and wants are crunched down to silly numbers on a piece of paper, you break them down into percentages. You even open up a savings account and say I can save 10% of my income per paycheck. But barely any time passes at all and you find yourself spending more, living from paycheck to paycheck. And your savings account keeps collecting dust and your nest egg is nothing but a pipe dream. You’re not alone, you’d be surprised just how many people experience these same things in different ways. Saving is hard and is affected by a lot of factors like habits, psychology, and livelihood and so on. These things affect how people manage their finances.

In this article, we’ll explore popular reasons why people struggle to save, help you identify your own habits that are stopping you from saving, and practical steps you can take to become a wise spender and a prudent saver.

Some reasons why you can’t save:

1.      Rising Cost of Living (Inflation)

You earn the same but your purchasing power has reduced. Common expenses like groceries, utilities and other essentials become hard to shoulder. So what you could afford before you can no longer afford again. This is true in many low income households, where their needs are so many and responsibilities heap up, but their meagre incomes can’t even substitute for 60% of their immediate expenditures. Rising cost of living makes saving difficult because people enter a never ending cycle of soul sucking debt holes.

2.      Debt

When repayment of debt takes priority over saving, the end result is lack of emergency funds. Debts come in different forms, from personal loans, bank loans and health bills to car loans and mortgage. Having this hanging over one’s neck means that money to be set aside for savings end up being sucked into the vacuum of the debt system. 

3.      Social Media Influence and Peer Pressure

The advertisement of luxury, high end lifestyles and materialism through social media platforms like YouTube, Facebook, Instagram and X, among others, has led to a surge in the attempts of individuals to replicate these unattainable and definitely not financially sound lifestyles, which are most of the time doctored and falsely advertised by brands to lure customers in. It happens with sports cars, designer clothes, exotic vacation trips, latest gadgets and so on.

Rather than letting common sense lead, the pressure to meet up with current pop culture and fashion trends, and the pressure to spend money on unnecessary items for the sake of appearance is rampant. FOMO (fear of missing out) can lead to illogical money choices that make saving harder.

4.      Unexpected Expenses

Victim of a scam, medical bills, job loss, global pandemic, you can master the act of paying bills down to a science, but life can be unpredictable and what you don’t prepare for or expect can always come to sweep you away. And they can wipe away any progress you have made on your saving journey.

5.      Procrastination

You can think to yourself, I’m secure in my business, or job, and this causes you to say, “I can always start saving later”. Here’s the thing, saving is a habit not a goal. And habit requires regular practice. The best time to start is now. You could make more money, but financial ignorance will lead you to panicking during emergencies, and ending up not having retirement funds.

6.      Lack of Financial Literacy

You’d be surprised by how many people lack financial literacy and basic budgeting skills. A lot of people don’t save money because of this, one would think schools would build a foundational background for young adults coming up about personal finance but that isn’t the case. As a result the economy is flooded with individuals who are just learning that money isn’t just cash at hand and money in the bank, but there’s also the concept of money management which obeys certain principles like budgeting, long-term planning and investments. Daily expenses compound but so do savings and interest rates. A simple understanding of these financial tips would make a difference in the saving habits of a lot of people.

7.      Impulse Buying

People use their emotions a lot when dealing with money. Impulse buying can be a coping mechanism for sadness, boredom, excitement, addiction etc. Emotional spending makes it hard for one to grow a saving habit.

 

Practical Strategies to Improve Your Saving Habit and Smash Those Saving Goals

Now that we’ve identified why people struggle with saving, and how relatable these struggles are, let’s look at some practical strategies to make it easier:

1.      Automate your savings: This eases the pressure of you, you can discipline you’re your mind to look at your paycheck with the eyes of a twenty percent cut that goes automatically to your savings.

2.      Create a Working System for your Debt Repayment: High Interest debts should be focused on and given priority. This enables you to actively reduce accruing debt and confronts the biggest obstacle to your having a meaningful spending habit.

3.      Set Clear Goals: Some people like to save with no clear goals in mind, however if that doesn’t work for you, then saving money with a clear goal in mind is your best bet, it could be for emergency funds, traveling, retirement, children’s college funds, whatever goal makes you stick to the habit!

4.      Curb Your Self-Destructive Spending Tendencies: Differentiate between you needs and wants. Learning to assess whether or not your purchases will bring long trm value will help you know what’s important and necessary and what isn’t.

5.      Budget: This can’t be emphasized on enough, create a realistic budget well within your income. Track your expenses and allocate a fixed percentage to savings. 

In conclusion

Saving money is hard, and the reasons vary from person to person, but they always fall under the same blanket reasons. Emotional and psychological and societal reasons. Possessing the right mindset and being resistant to pressure and influence as well as consistency will produce astounding results and in the next twenty years you could well have a level of stability your peers who refused to save won’t have.