Why Can't I Save Money? (Plus 6 Solutions!)

Do you ever wonder: why can’t I save money? Here are 15 reasons why you can’t save money, and 6 things you can do to change that!

Are you frustrated with your financial life?

Are you struggling to make ends meet?

Do you wonder why you can’t seem to save any money?

Maybe you learned poor spending habits from your family of origin.

Or, you have a lot of debt and that burden is hanging over your head.

Maybe someone never taught you specific steps for how to save money.

Or, you are on a tight budget and are simply struggling to make ends meet.

No matter where you are now, you absolutely can make some changes for your financial future, even if they are small ones!

As a single mom, I completely understand these financial difficulties and have also wondered why I can’t save money.

I had to step back and take a good look at my finances, educate myself on financial matters, and make some changes in the way I manage money.

Was it easy? No, but I was determined to have a better financial future for myself and my kids.

Now, I am 100% debt-free, have a good amount in my savings and retirement accounts, and even contribute a little bit every year to 529 college savings plans for my 2 kids.

I feel better about my financial future and am able to save money now. You can too!

First, let’s take a look at several reasons why you can’t save money and then see what you can do to start saving now.

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Why Can’t I Save Money?

Here are the fundamental reasons why you can’t save money.

Plus, at the end are 5 solutions to this problem!

A woman in a store is looking in an open wallet that is empty.

1. If you have money, you spend it.

I learned a lot of poor money habits from my dad. This was one of the first ones. If he had money, he spent it. He had no concept of saving or preparing for the future. It was as if money just burned a hole in his pocket!

If you find that when you have money, you spend it first, then you need to retrain your brain to save some for yourself first!

What should you do?

Set up automatic transfer to put money directly into your savings account each month! You can set this up to transfer money out of your checking account right after you are paid so you don’t even “see” it.

2. If you get extra or “bonus” money, you spend it.

Anytime you get extra money, above and beyond your normal paycheck, you spend it.

Extra money can come from:

rebates
stimulus checks
holiday bonuses
tax refunds
birthday gifts
a raise

What should you do?

One of the best money tips I read was that if you get a raise or extra money, continue to live on the budget you had and put this extra money into a savings or investment account.

However, if you have a lot of debt, you should consider using any “bonus” money to get rid of that debt for good!

Then, when you are debt-free, you can put the extra money into a savings or investment account and live like you never saw it. You will reach your financial goals faster this way!

3. You do not make it a priority to pay off debt.

If you have a lot of debt (particularly credit card debt or student loans), it will be very hard for you to save money (since you already owe money to someone else!).

If you are treating your credit card as income, you will need to change your mindset. The best thing to do might be to get rid of a credit card completely and use a debit card or cash instead!

What should you do?

Make it a top priority to pay off all debt as quickly as possible. Then, when you are debt-free stay that way!

You might think, well, everyone has debt, so who cares? But, why compare yourself to other people who are living with debt? Instead, make a goal to get out of debt and save money for a financial goal.

You will appreciate the feeling of being financially free of debt!

4. You live beyond your means.

Living beyond your means is the quickest way to get in or stay in debt and avoid saving money.

You certainly can’t save money if you are spending more than you earn.

What should you do?

Make a budget and a plan to spend less than you earn.

You might try a “no-spend” month where you only spend money on absolute necessities (food, shelter, transportation to work), and see how much extra you have at the end of the month.

You can learn what you can truly live without and then put that “extra” money into savings!

5. You ignore lifestyle creep.

What is lifestyle creep?

As you increase your income, your lifestyle expenses increase to match.

What was previously an “extra” expense or a luxury, now becomes a necessity!

Your mindset changes to view items as things you deserve: I have a right to own this!, instead of determining whether or not you want to spend cash on this item: I can choose to spend my money on this or not!

Even my 6 year old understand the concept of using money for a purpose. I will often say something like “I can buy this, but I would rather spend our money on _____” and she often agrees with me.

This article explains lifestyle creep in further detail.

Fancier, more expensive items won’t bring your peace or make your life happier!

What should you do?

Only buy what you can really afford (in other words, what you can pay cash for and not go into debt to purchase).

6. You don’t understand personal finance or how to make better money decisions.

I get it.

I didn’t either.

When I got divorced, I made a decision to take charge of my finances and learn more about personal finance so I could change my future.

I felt nervous and afraid that I would not be able to learn or understand, but I was determined. I started with a few simple personal finance books that were easy for beginners.

Here are 2 of my favorites:

The Simple Path to Wealth by JL Collins

All Your Worth: The Ultimate Lifetime Money Plan by Elizabeth Warren & Amelia Warren Tyagi

Dave Ramsey is also popular. He outlines “baby steps” for improving your financial situation. This book also had some good, easy-to-understand tips for the beginner:

The Total Money Makeover: A Proven Plan for Financial Fitness by Dave Ramsey

What should you do?

You can make better money decisions! Take some time to learn more about personal finance.

Also, keep in mind that if a financial promise sounds too good to be true, it most likely is (“make $1000 in 10 minutes”, “invest in this and be rich tomorrow”, etc). However, determination, hard work, and steady perseverance will help you reach your financial goals!

7. You are not prepared for emergencies or unexpected costs.

If you don’t have money in an emergency fund, then when an important unexpected expenses pops up how will you pay for it?

Everyone should have an emergency fund!

Having extra money in a special savings account can give peace of mind and help you when you are face with an unexpected emergency or situation, like:

emergency medical bills
car repairs
home repairs

Don’t think, “I’ll save money later.” Be prepared now in case something happens to you or to one of your loved ones.

What should you do?

Start a separate emergency fund today and contribute to it regularly every month until you have about 3-6 months of living expenses saved up.

Related: Emergency Fund Basics

8. You do not understand needs vs. wants.

I see this all the time.

People complain about their finances but do not understand the difference between a need and a want.

They spend (and overspend) on wants.

Your basic needs are food, water, clothing, shelter, transportation to work.

These are not needs:

daily latte
a fancy, expensive car (a basic car will still get you there!)
a house you can’t afford
gourmet meals every night (or eating out too often)

What should you do?

Write down a list of your basic needs and how much they cost, plus a list of wants and determine what you can cut out from the “wants” category.

Two hands opening a wallet that is empty.

9. You do not prioritize saving.

It is hard to save!

Just like it’s hard to eat healthy meals, exercise regularly, study in order to get good grades and graduate.

If you really want it, you will make it a priority!

What should you do?

Make a plan for saving and stick to it (like a diet or exercise program!). Do whatever it takes to keep yourself on track – have a “budget buddy”, write down weekly goals, keep track of your spending.

10. You don’t have a budget.

People don’t like budgeting. They equate it with restrictions and sacrifices: I can’t spend on this because it’s not in my budget.

No fun, right?

I like to look at a budget as a plan for your money.

You are telling your money what you want it do, instead of just spending on whatever.

What should you do?

Setting up a budget doesn’t have to be complicated! I use a simple composition notebook with 2 columns: income and expenses.

If you prefer, you can use financial apps to budget: like Mint or EveryDollar.

11. You pay too much for housing.

If you are paying too much for housing, then it will be very difficult for you to save money.

In general, financial experts recommend that 25-30% of your income should go toward rent/mortage.

What should you do?

If you are paying well above that percentage, you should look for ways to decrease your housing costs.

Some ideas:

moving to a cheaper location in your city (or to another city)
downsizing to a smaller house or apartment
getting a roommate to offset costs

12. You spend too much on food (or anything else for that matter).

Remember, food is a basic need, but gourmet meals at fancy restaurants are not!

What should you do?

If you are spending too much on food, look for simple ways to save money:

limit eating out to 1-2 times per month
meal plan
shop on selected days
use up leftovers before shopping

If you are spending too much on anything else, look for ways to cut costs in those areas.

13. You disregard small amounts of money.

You may think, “It’s only a $5 coffee”, but if you buy coffee 20 times per month that would be $100!

And $100 a month times 12 months – $1200 per year!

The small amounts can add up quickly, especially if we think it doesn’t matter and we ignore our spending.

What should you do?

Meticulously track spending for one month and see where these “little” costs add up. Then, make changes to your budget.

14. You don’t make enough money.

This is tough!

If you are struggling because you don’t make enough money, then it will be hard to save money.

What should you do?

Look for ways to cut expenses or make more money.

15. You don’t set financial goals.

Setting a financial goal will help keep you motivated to save money.

You can make a larger financial goal like:

going on a fun vacation with your kids
paying cash for a car
paying cash for Christmas gifts
saving for a downpayment on a house

Write your goal down and put it somewhere you can see it everyday.

What You Can Do to Start Saving Money Now!

If you are struggling to save money, don’t worry, there are some real, practical things you can do to start saving now.

Change your habits and use the following 6 tips to start saving money today!

Three hands are putting coins into empty glass jars. The first has few coins, the second is about half full, and the third is full to the top.

1. Create a detailed budget.

First, you should created a detailed budget. Remember, a budget is merely a plan for your money.

Take a notebook.

For one month, write down your income in one column and all of your expenses in another (yes, all!). Add the columns and get 2 totals.

You want your expenses to be less than your income. Whatever is leftover can go into savings.

Now, rewrite your budget and tell your money what to do.

2. Track your spending.

It sounds tedious, but if you find that you just can’t save money, then you need to meticulously track your spending. Not forever, but for a month or two at least.

You need to see where your money is going and where you can make changes so you can have money to save.

You can seriously cut spending and change your spending habits!

Then, use the money you save to completely get rid of debt and set up an emergency fund.

3. Get rid of debt.

Make a plan to get rid of debt (and stay away from it in the future!).

Nothing can sabotage your savings plan as much as debt.

Once you have made a budget and tracked your spending, you can see where you can cut expenses and apply the “extra” money to aggressively pay off your debt.

If you need to, you can get an extra side job to help you pay off debt more quickly!

4. Prioritize saving.

You need to make saving money a priority in your life.

Pay yourself first!

If you do, you absolutely will find ways to save money each month! (If you can prioritize watching your favorite show each week or prioritize your weekly coffee, you can do this!)

Here are some things you can do to make saving money a priority:

set up automatic withdrawals (have a regular amount of money automatically go into your savings each month – even if it’s just $10)
reevaluate your bills every month or two and negotiate for a lower bill
look for new ways to cut expenses
when you receive extra money, save it!
have separate saving accounts (for example, an emergency fund and a vacation fund)

When you are doing well financially, save extra money for the future (and possible times when you won’t be doing well financially).

5. Set 1-2 large financial goals.

Set a large, realistic financial goal.

Nothing motivates or encourages someone like setting a goal.

People who set goals and regularly review them are more likely to achieve them!

Writing your financial goals down on a piece of paper and putting them in a prominent place is even better!

6. Take responsibility.

It’s SO easy to make excuses!

I can’t save money because I’m a single mom.
I can’t save money because I have a lot of debt.
I can’t save money because I live in a high cost of living area.

Take charge of your life and take responsibility.

Persevere and win the battle!

You need to work at it, but you can do it!

Finally, don’t forget to put aside some “fun money” each month to spend on yourself. If you are too strict with your budget, you’ll give up too soon (like when you go on a diet and your eating restrictions are too strict!)

Stop saying to yourself, “Why can’t I save money?” and start telling yourself that you can! (You can read more about the positive effects of affirmations for kids (and adults) here.)

What has helped you to save more money? What are some changes that you are going to make in your budget today?

Why Can’t I Save Money? (Plus 6 Solutions!)