There are many reason that you have been unable to save money. Saving can feel like an impossible task that many Americans struggle with. A study revealed that half the population—47%—had zero or negative savings accounts.
In the same year, the Federal Reserve found that the average saving rate was 4.8% of disposable income—not nearly enough to handle expenses should an illness or job loss become your reality.
Having a savings account should be a non-negotiable in your financial planning, and if you’ve found putting money away to be an insurmountable challenge, you may be struggling with one of the following reasons. Read on to find out how you can change your financial situation and start putting money away for a rainy day.
Why You Haven’t Been Unable To Save Money
1. Forgetting to Budget
If you don’t budget out each month, you’re doing yourself a disservice. Taking an hour or less to draw up your financial plans for the month allows you to visualize where your money goes, and highlights any inconsistencies or overspending that you might have otherwise missed.
Using a budget allows you to control every last cent in your wallet, helping you avoid unnecessary expenses and cutting down on the excess spending that comes along with lack of planning. If you find it difficult to do on your own with pen and paper, use one of the many electronic budgeting apps like PocketGuard that will allow you to monitor exactly where you’re spending your money and take steps to cut out unnecessary spending.
2. Paying Off Debt
Paying off your debt is important, especially because high interest rates can rack up, making your savings account moot point. In fact, the interest you pay on a lingering debt is, nine out of 10 times, way more than the interest you’ll make off of your savings account.
The sooner you pay off your debt, the more money you’ll have to put into savings (and the psychological relief isn’t too shabby either). Tackle your debt through the avalanche method, focusing your payment efforts on the accounts that charge the highest interest first. Be sure you always keep enough to dedicate to minimum payments on your other accounts and ensure you don’t rack up numerous late fees.
3. Bad Habits
Do you have any bad spending habits that would save you tons if you were to give up? The best and most common example of a highly unnecessary expense is the purchase of cigarettes. Smoking kills, and there’s never been more reason to give up this deadly and highly expensive habit. If you’re finding it impossible to quit on your own, use a vaping alternative from a website like www.NJOY.com to get that nicotine fix without spending a fortune and ruining your lungs in the process.
While not necessarily a bad habit, eating out isn’t without its consequences. Not only is it usually terrible for your health, but it’s also extremely expensive, especially if done on a regular basis. Instead of heading out for lunch every day, prepare your own meals at the beginning of the week.
4. Not Seeking Financial Help
If you’ve never talked with a financial advisor, book an appointment today. Their expertise and financial acumen could save you tons when it comes to taxes and everyday expenses, not to mention they can help you determine the best routes when it comes to work savings accounts like 401(k)s or IRAs.
5. Living in the Moment
It’s a romantic notion to be sure, but living “in the moment” is one of the most common financial mistakes. Having no regard for future expenses is a surefire way to find yourself in a load of debt. That’s why budgeting and making a plan with a financial advisor is so essential to success.
This type of spending also tends to lend itself to luxury purchases that we truly don’t need. Whether it’s travel or new clothing, dinners out or a new electronic purchase, stop yourself before you even start.
Saving money shouldn’t be an impossibility. With these money-saving tips in your arsenal, you’re well on your way to stocking away money for the future and putting yourself and your family in the best financial position possible.
What about you? Why haven’t you been unable to save money? How are you fighting it?