Do you struggle saving money? If your answer is yes, you are not alone in your struggle to save money. According to statistics, “45% of Americans have saved nothing for retirement, including 40% of Baby Boomers. 38% don’t actively save for retirement at all.”
Having something saved up for retirement is very important because a time will come when even the strongest of us will be unable to work anymore.
The first thing that you should do now to overcome financial struggle that leads to the inability to save, is to find out the reasons for your inability to saving money, and then make a decision on ways to fix it.
Here are some reason why you might struggle saving money and how you can overcome it.
#1 Not Having Goals Causes Struggle Saving Money
Everyone ought to have personal financial goals for their lives, whether short term or long term. Drawing up tangible and realistic financial goals and following them religiously is a key to avoid your struggle to save money and achieve success in all your financial goals.
According to a survey by the Northwestern Mutual, the number of Americans ages 25 and older who identify themselves as “non-planners” and as having “no established financial goals” doubled to 14 percent between 2012 and 2015.
A financial goal is the first step that sets you on a path to overcoming money problems. Your goal should be based on what matters most to you – your own values and interests. What are you willing to sacrifice in order to achieve your goal sooner? What can help you stay the course?
A realistic goal should be:
- Measurable. Set a time limit for your goal, such as the deadline to buy a new house or the age at which you wish to retire.
- Achievable: Plan with your income (and anticipated income) to plan your financial goals for the future. Don’t reckon on winning the lottery to accomplish your goal.
- Specific: ‘To acquire wealth’ is not a specific or clear goal, but “to save 30% for a house mortgage” is.
Regardless of what life stage you are in, it’s never too late to set a financial goal today.
#2 Spending Without a Budget
According to a 2013 Gallup poll, only 32 percent of U.S. households prepare a monthly budget. How can you manage your expenses and save money without a budget?
One of the best weapons for eliminating financial problems is a budget. A budget is a very useful tool that helps you prioritize your expenses and handle your money—regardless of how little you have.
A budget guides your spending decisions and ensures you’re spending money on what’s really important to you. It helps you to spend your money in a way that helps solve your financial problem.
Preparing and monitoring your budget will help you recognize wasteful expenses, adjust quickly to changes in your financial situation, and achieve your financial goals. Creating a budget will also reduce your stress levels.
You can learn more about how a budget works here
#3 Paying Too Much for College
According to Student Hero, “Americans owe over $1.4 trillion in student loan debt, spread out among about 44 million borrowers. That’s about $620 billion more than the total U.S. credit card debt. In fact, the average Class of 2016 graduate has $37,172 in student loan debt, up six percent from last year”
There’s no doubt that as a college student, you may not only struggle saving money, you will likely end up with student debt. About all college students will obtain some form of student loan at some stage in their college career. This debt, after graduation can at times seems devastating.
But luckily, there are ways to ease some of the debt and the anxiety that goes with it. By following a few easy tips, you can shun student loan debt, or at least make it more manageable.
- There are several ways to reduce & avoid overwhelming college student loan debt including:
- Getting a Job and Starting to Save Early
- Getting a College Credit without Paying for College Classes
- Looking High and Low for Scholarships
- Rethinking Your Choice of College
- Avoiding Private Student Loans
- Working Part-Time
- Making a Budget
- Finding Ways to Reduce Your Costs
#4 Lack Of Investments
Nearly 80% of millennia’s, according to a Harris poll do not invest in the stock market. According to the poll result, more than 40% said they feel they don’t have enough money to invest, 34% said they don’t know how, while 13% expressly blamed student debt for their inability to invest.
You’ve undoubtedly heard about the risks connected with investing. And it is indeed true that all investments involve some kind of risk. But what about the risk associated with not investing? Isn’t there a greater risk there?
As one of my mentors (Late Archbishop Benson Idahosa) would say, “It’s risky not to take risks.”
Actually, by refusing to invest, you are taking several risks, among which may include:
- Inability to maintain your financial independence. While you may not become completely broke, you could end up struggling to make ends meet or, worse, you could become dependent on others for financial assistance.
- You may outlast your money
- You might not be able to retire on your terms.
One of the most important rewards of investing is that you can have your money work for you to make more money and not having to work your entire life. There are just two ways to make money: either by working and/or by making your assets work for you.
You can find out how to get started with investing here.
#5 Not Earning Enough Causes Struggle Saving Money
76% of Americans are living paycheck-to-paycheck today and just one event could cause a financial panic. Even if an event that could cause a financial crisis do not occur, the accumulation of increasing bills can eventually cause a financial crisis.
If you’re not earning enough money, it might not be easy to pay your utilities, mortgage, or put food on the table. Not earning enough money to pay your bills is an enormous problem many Americans have today.
You actually just have two choices – to make more money or to spend less.
When you don’t make enough money to cover your expenses, you need to take far-reaching actions to earn more or drastically reduce your expenses.
With the costs of living always going up, the best option is for you to find out ways of earning more money. One of the best ways you can go about that is to learn how to diversify your income.
Diversifying your income will help you to create other means of income, thereby giving you more financial power and freedom.
#6 Trying to be like the Jones Leads to Struggle Saving Money
In the words of Robert Kiyosaki, “Too many people buy things they don’t need with money they don’t have to impress people they don’t know.”
“Keeping up with the Joneses” is a phrase that expresses the desire to possess as much and to appear to be as well off as others around us. Regrettably, many people have had to file for bankruptcy because of the desire to “keep up with the Joneses.”
Many Americans live above their means. A Bankrate survey, as reported by US News found that about one-third of people ages 30 to 49 had more credit card debt than savings
In an attempt to be like the Jones, many people burden themselves with unreal lifestyles and avoidable debts that might, one day, come back to haunt them.
The probability is that those neighbors you’re struggling to keep up with are also living above their means.
If you desire financial freedom and happiness, keeping up with the Joneses is a way to never get there.
Here’s what you can do to stop the negative and sometimes addictive behavior of keeping with the Joneses. Whenever you need to make a big purchase, take the time to examine and identify your motive. Are you buying to fill a genuine need, or you are buying to impress others?
If you are buying to create a false impression of success to impress others, walk away. Sweep those Joneses out of your mind and save that cash to spend on things that will give you true happiness.
#7 Impulse Buying Causes Struggle Saving Money
One of the major reasons most people struggle saving money is impulse buying. If you find that you repeatedly spend money without thinking much about what or why you’re buying, you may have an impulse buying tendency.
Impulse buying represents almost 40% of all the money spent on e-commerce sites, according to User Interface Engineering. What drives shoppers to make these impulse purchases? It isn’t price, but rather it’s tied to design elements of the site itself
It can be really hard to resist the urge to buy on impulse, especially when we are paying with credit cards.
Too much level of impulse buying can lead you to debt and unhappiness, so it’s in your best to identify the warning signs and avoid it like a plague. Knowing what triggers you off to buy on impulse can help you spend less money on impulse.
There are different ways to avoid impulse buying including following a mandatory waiting period, paying cash, shopping less often, etc.
Are there other ways you have successfully used to solve your struggle to save money? Please share them in the comments below.