Are you good at saving money, or do you spend every money you earn? Why do people find it hard to save despite earning a decent income? Here, we will explore why it’s hard to save.
Why Is It So Hard to Save Money? (7 Tips to Consider)
How easy is it for you commit to saving? Does it feel as hard as many people consider it to be? My colleagues and friends kept asking me this question, “why is it so hard to save money?”
Well, spending the money you have earned always feels easy compared to putting it somewhere for future use. Some expenses always seem to pop up every time you have some cash in your wallet. Only when you need the money again, do you see the essence of savings.
If you have been struggling to save money, here is a list of some tips that you can consider.
The first step is using a free tool like Personal Capital to help you save money more effectively.
You can use their free retirement planner, net worth tracker and cash flow tracking to help ensure you are building a better financial future. All for completely free and no strings attached.
However, before that, let’s see the meaning of the term saving.
What does the term saving stand for?
Savings refers to the money you put aside from your income to spend it at a later date. The money you set aside can be for any form of deferred consumption. You can be saving for retirement, to purchase a new house, new car, unforeseen medical expenses, and more.
To save money, you do this through various ways such as:
- Through a deposit account,
- Investment fund
- A pension account
- Or even cash
Apart from setting aside some of the money you have earned, saving can also refer to the reduction of your expenditure. This means that if you are used to spending $200 on water bills but you buy efficient gadgets in your house that reduce this to $170.
The result of this is savings on your spending.
Therefore, saving can be both in terms of taking some part of your income and keeping it for later use or reducing your monthly recurring costs.
But How Do We Manage to Save?
If you want to nurture a saving habit, there are two principles you should follow:
The first thing is to spend less, even when your income doesn’t change. The difference between your income and what you are spending will help you get some money that you can save.
Also, you can try to find alternative sources of income to increase your earnings, but make sure that your spending remains constant.
This means that you will now have an extra amount of money that you can allocate to savings.
There are numerous ways through which you can make extra money even while still working on your 9 am to 5 pm routine. These may include:
Online freelance sites
Through these sites, you can easily make some extra money through content writing for interested clients, sell gigs, selling photos online, and almost any other task you can think of.
The platforms enable you to sell your skills online and make money.
Another way to make money online is by using surveys to earn small “wins” that can go to your savings. I used these small wins to pay off $60,000 of student loans faster while saving for a house.
Here are some survey sites that will give you cash simply by answering questions:
- Opinion Output – Use my link and get $10 free when you sign up. It’s 100% free to join.
- Swagbucks – Get $5 completely free if you join using my link. This is also 100% free to join and use.
- Survey Junkie – Simple, straightforward way to make money with surveys. Survey Junkie is one of the oldest and largest survey options out there.
Offline money-making gigs
Besides going online, you can also do some offline tasks that can also help you make some good cash. For example, you can walk your neighbors’ dogs for money, do their lawns, reselling sneakers, babysit their kids, among other tasks.
These are some of the most well-known under the table jobs that will pay you cash.
Also, you can make an investment that could earn you passive income like flipping houses. Some of these activities can earn you some excellent cash that you can put into your savings.
So, don’t say your income is little, you can’t save. You can always find something extra to do and earn money.
See Related: 12 Ways to Drastically Reduce Your Expenses
Top Saving Tips You Must Know
If you are looking for tips to make saving money easy, here just the ideal ones:
Set Your Saving Goals
You can’t just save aimlessly. It is crucial that you know the reasons why you are saving, and for how long you want to do so. This helps to prevent getting tired along the way or derailing from your agenda.
For these reasons, you must have some clear goals toward your savings. Having clear goals will ensure that you don’t derail from your target and that you do it even when you don’t want to. I know that saving is not a walk in the park. It requires determination and commitment.
However, if you want to, you can do it. An excellent example of a saving goal is to say, “I will be saving 20% of my income.”
This means that no matter how much you earn, 20% of that money will go to savings.
By doing so, you will always be aware of how much you will remain with to cater to your expenditures. Also, it helps to know how long you will save to meet your target.
Pro tip: Use a tool like Trim to automatically save money on cable bills, subscriptions and regular household expenses. It’s completely free to use and uses artificial intelligence to automatically recommend areas to “trim” your expenses.
Open a Different Account For Your Savings
You must separate your finances. It’s not only prudent to separate your savings from your other accounts, but it is also the right thing to do. For example, you should open a savings account that is even locked for a specified period.
This will help you avoid the temptation of withdrawing the cash for just minor money issues or before you meet your target. The whole idea of a saving account is that you should not use it to pay for your recurrent expenses.
No other costs should be paid from this account except for the intended one.
Money should always be going in and not out. To ensure that this happens, you can create a standing order from your main account to ensure that a certain amount is sent to the savings account every month without fail.
One thing to note here is that, the harder it is to access the savings account, the better.
This discourages any thoughts of withdrawal from the account. This, in return, guarantees that your money is safe and that your goals will be met.
Open a savings account with CIT Bank to get a very competitive savings rate. You can automatically transfer money into the account to help build your emergency fund savings.
Have a Reason for Your Savings
Before you start your saving journey, it’s ideal to have a purpose for what you are saving. For example, you can decide to save for a car, a better house, or investment capital, among others. Having a clear purpose will act as an incentive to help you keep saving until you accomplish what you want.
For instance, if you want to invest in real estate and want to save for the initial investment capital, this purpose will encourage you to keep saving.
Personal Capital is an app that can help you keep track of your investments and money. And, it is entirely free for use.
If you save for the sake of it, you might end up not accomplishing much since you don’t know when to use the money you have saved. You are saving aimlessly.
The purpose is the pillar that will hold those saving goals together. For example, if you know you want to save for a house, this will help ensure that you stick to saving, even if the time frame for accomplishing is long.
It can be tough to just save without having a reason for it. The purpose makes the hard saving more bearable when you remember the reason why.
See Related: Pocketsmith Review
Apportion Some Percentage of Your Savings to “Reward Savings”
To make it even more bearable, make sure that you set aside “reward savings.” This ensures that when you want to use some money from your savings account, you know exactly how much you can use and the limit you can’t go beyond.
By having this portion, ensures that you have some money access when you want to splurge, but prevents you from using what you shouldn’t. Without this allocation, “why is it so hard to save money,” is a question that you’ll always ask yourself.
Having this fund helps to spice up the saving process, as you know, there is some incentive out of it.
If you’d like to continually save money on routine expenses, consider using various cashback apps. These apps will automatically give you gift cards or bonuses for shopping at routine stores. I use these apps every single day to get rewarded for buying groceries.
Then, use these cashback rewards to save faster or pay down debt.
- Drop App – Link your credit and debit accounts and get $5 free when you use my link.
- Rakuten – Rakuten automatically credits you with cashback when you shop online and your favorite stores. Get $10 completely free if you use my link.
- Dosh – Dosh is another cashback app that will reward you for shopping at some of your favorite stores. Stack this app with a cashback credit card to double or triple your rewards.
Here are some of my other favorite cashback apps to consider.
Change Your Mindset and Lifestyle
When it comes to saving, your mindset is a vital factor. Your mind should be committed to the endeavor. Also, don’t try to “crash save,” it won’t work.
You must be realistic about what you can afford, and what won’t create too much temptation towards you spending the saved money. You should not go too hard on yourself.
For example, you can start by making some small changes in various aspects of your life. With time, these minor changes will have a positive and visible effect on your bank balance. When you do money management daily, these activities will, in the long run, increase your available cash.
This is to show that money-saving doesn’t have to be that hard. You can easily make it a habit by making it part of you.
Changing your lifestyle may mean that you have to forego some of the usual things you do. However, it doesn’t have to make life dull.
For example, you can reduce the number of times you take coffee on your favorite joint. But, instead of entirely not having coffee, you can just cut the number of times. The best way to do this is to keep track of your expenses.
You should have a spreadsheet for your costs to ensure that you don’t overspend on some expenses. These are some of my personal favorite financial tools that unlock success.
Make Use of The Envelope System
This method can make saving quite easy. It is among the best ways that keep you conscious of your spending. But how does the system work?
This envelope system involves apportioning cash for most of your main expenses and keeping them in envelopes. These expenses may include things like food, gas, transport, among many other costs.
This process helps you avoid overspending. The way that this one works is that, once you exhaust a particular envelope, you shouldn’t spend any more money on that expense unless it’s an emergency. In the case of an emergency, then you can source some money from the other envelopes to cater to that.
The essence of all these is to help avoid overspending on some expenses. Your mind is alert that you have to keep your spending on a check. But does it have to be physical envelopes?
The answer to the question is No. You can even open an account for your major expenses.
For example, you can set aside some money for going out in a specific account. This way, every time you go out, you can spend from this account. When money in this account is exhausted, you can’t spend on going out.
It’s not a must that you use physical envelopes. You can track your spending by setting up a bank account separately with its debit card.
See Related: Best Cashback Apps to Save Money
Try Using Cash More
If you haven’t noticed, it is straightforward for you to overspend when you are using your credit or debit card for payment. Most people tend not to see or are not conscious of how much they are spending when using a credit card.
This may make you spend more than you had anticipated, which can be detrimental to your finances.
To avert this, it is advisable that where you can, use cash to pay for your expenses.
With cash, you tend to more aware and may avoid spending too much.
See Related: 16 Helpful Pieces of Financial Advice
Conclusion on Why is it so Hard to Save Money?
Why is it so hard to save and budget money? Although saving is one principle that is healthy for our financial future, it may not be as easy as it sounds. Sometimes it’s even harder and requires a lot of commitment and budgeting to achieve.
This is why, in this article on “why is it so hard to save money?” I have outlined some of the ideal tips to help ease the process for you.
These tips will help ensure that that hectic process turns to be bliss.
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The Alpha financial perspectives will help you find new ways to make money, which are aggressive, unknown and require significant hard work. Use Personal Capital to monitor your cash flow and net worth.