Are you living paycheck to paycheck? Exhausted by making ends meet and frustrated that there’s no money left for anything, let alone savings?
You’re not alone.
Studies show that one-third of Americans don’t have enough money saved for retirement and another one out of every four Americans has less than $1,000 saved for emergencies.
Yes, the cost of living keeps going up. Yes, unemployment is still a problem. But for many Americans, the problem isn’t that there’s not enough money. It’s that they’re spending too much.
A 2014 study done by Interest.com looked at the income, spending and savings of Americans in 18 major cities across the country.
The study found that if Americans followed the median spending in their respective cities, they should have money to save. This study includes cities where the cost of living is pretty high. The study showed that Americans could save, but they’re choosing not to. Instead, they’re spending the money. The study found that the median savings rate across those cities was zero.
Now, before I go any further, I know there are people living at or below the poverty line, who struggle to obtain just the basic needs of food and shelter. This article is not about them or for them. I’m talking to those of you with mid-level incomes (or higher) who just can’t seem to save any money.
For many of you, it’s time to face the cold, hard truth: You can save money. You’ve chosen not to.
Don’t believe me? Then ask yourself these questions:
- Do you have cable or satellite television?
- How big is your home? How much do you owe on it? Does your house payment (or rent) take 30% or more of your income?
- How many vehicles do you own? Are they paid for?
- How many vacations do you take in a year?
- How many concerts or sporting events do you go to each year?
- Do you kids attend private school? Take private lessons? Go to lots of summer camps? Have too many toys?
- How often do you eat out? What types of restaurants?
- How often do you buy new clothes? Where do you buy them?
- How many cell phones do you have in your household?
- How often do you buy new technology? Do you always have the latest and greatest gadgets?
- How much credit card debt to you have? Do you remember what you charged?
Honestly answering these questions is just the start of addressing why you can’t seem to save any money.
The real reason we can’t save is that we’re living beyond our means. We want it all, and we’re charging and spending like we can have it all.
But we can’t have it all. And for the sake of our future, we need to figure out how we’re going to reverse the over-spending cycle. We have to start saving. We have to save for rainy days. We have to save for the unexpected. And we have to save for retirement. No one else can do it for us.
How do I know this? Because I’ve been there. I’ve sat in a nice restaurant and cried to my husband about how we never seem to get ahead. I built a dream house I could afford on two incomes and then decided to become a stay-at-home mom. I took vacations and then figured out how to pay for them after I got home. I’ve been guilty of spending beyond my means. And I’ve learned how to pick myself up, dust myself off, and start making positive changes to my personal finances.
How to Save Money When You Think You Can’t
The first thing you’ve got to do is re-frame your thinking. You have to accept responsibility for your own situation. If you continue to throw your hands up in the air and act like saving is impossible because of (insert excuse here) then you will never be able to save. Stop making excuses. Stop hoping for windfalls and lottery winnings. No one cares as much about your financial future than you. So why leave that future to fate? It’s time to make saving money a priority.
Take a close look at your spending and see where your money is going. What things are wants and what are needs? Think about how your list of “needs” would look to someone with half of your income. Do you still think those items are needs?
Get serious about cutting your spending. Stop using your credit cards. Stop buying things just to buy things. What expenses could you trim or eliminate altogether? What are some less expensive alternatives to your old spending habits? For example, you could use your library as a source of entertainment. You could buy the things you need at thrift shops instead of paying full price at the mall. Learn how to shop intentionally and splurge responsibly.
You don’t have to deprive yourself. You just need to change your approach to how you get the things you need and want so that you live within your means.
Be very careful with extra money. An unexpected windfall, a pay raise, or extra money you make selling your old stuff, can be bad for your savings if you allow lifestyle creep. Just because you started making an extra $100 a month doesn’t mean you should see it as a license to spend it all. Whenever your income increases or extra money comes your way, make it a point to save at least half of it. That way, you’ll get to experience some “fun” with your new money, but you’ll also still be growing your savings.
Make savings automatic. Set up automatic deposits of money directly from your paycheck into savings and retirement accounts. Then treat that money as untouchable. You can’t spend the money if it’s not available to you.
The money you have left after you’ve put money in savings is yours to spend as you wish. When you fail to make savings automatic, you will find that there is never any money left at the end of the month to put into savings. Pay yourself first, and you’ll be better prepared for the future.
Start today. Don’t put off saving money any longer. Every little bit of money you can put away for your future will help you be prepared for whatever life brings.
Saving money is not easy. You will have to make some changes to your lifestyle. It is something that you will have to work at each and every day.
You can do it. I know you can.