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.
debt debs says
We always thought we weren’t extravagant, but yet did many of the things on your list. It’s so much more freeing to live within your means, and you enjoy special treats that much more if you plan and save for them. We have been paying off our debt for 2+ years and still have a long ways to go, but I feel we now have a healthy relationship with money and what it can do for us and what it can’t. The ‘I deserve’ mentality is no longer in our psyche!
Christina Brown says
I think that “I deserve it” mentality is probably one of the hardest things to overcome – whether it’s how you spend your money or the food you eat! It’s good that you have learned to break that cycle and are on the right track to a better relationship with money.
Victoria @thefrugltrial says
The secret is not living beyond our means but I think for many (including myself) that is easier said than done.
I am certainly better with my money than I use to be and I would tell me 20 something self to automate savings each pay day.
Thanks for mentioning that some people are living below the poverty level, and can’t do much beyond struggling to survive. I’m one of those people, due to serious and chronic health problems. (I wouldn’t even have a landline phone and internet service if a relative didn’t pay for it for me.) I frequently read articles offering money advice, and it’s amazing how many times the writers of these articles seem unable to understand that there really are people out here who can’t do much to improve their financial situation. When I was younger, healthier, married, and working, my husband and I made most of the mistakes you’ve described; I’m just lucky that we didn’t get too deeply in debt.
Christina Brown says
You’re welcome. It always frustrates me and saddens me to see folks struggle who SHOULD be able to save but choose not to, when there are so many at the poverty level (through no fault of their own) who would love to be have that choice.
Erin | It All Matters Mom says
Good tips. We’ve been without cable for almost a year now (wow) and rarely, if ever, eat out. And if we have to eat out, we pick off the dollar menu to fill us up until we get home. We also take any extra money (if we didn’t have our normal “unexpected expenses) and put it in savings, as well as our tax returns. The tax returns kill me knowing what we could do with it, but I know putting it in savings is the smartest thing to do since we want to pay cash for our next vehicle. Great post!
I totally agree. I have learned how to save however little. I was always waiting to have enough left over before saving, but guess what, I never had enough left over.
Tina R. says
Great reminder if you don’t save every paycheck, you will be disappointed later and not prepared for emergencies. Going to start today and my goal of living within my means. Thanks for the motivating advice!
thank you so much for this! I needed to read this- and it was perfect timing. Truly a blessing.
Christina Brown says
You’re welcome, Richelle! It is a message that we all need to be reminded of from time to time.
Reading this I paid off the last $400 on Discover card that I owe. I will no longer chase points for gift cards. I will use a debit card at the market to keep track of my spending. I do have basic cable due to being home with disability. My medical & dental are high due to my afflictions. I rarely buy clothes or visit a beauty parlor. Thanks for this article. I need to do a solid budget. What % of dollars go where? Any advise? Thanks again??
Christina Brown says
Congrats on paying off that credit card debt! That’s a huge accomplishment! I find that the best way to start budgeting is to spend some time tracking what you spend money on. That allows you to see where there is room for savings and also gives you some guidelines as to what you need to budget for each month. And don’t forget those semi-annual/annual/every-once-in-awhile expenses. For example, if your car insurance is $400 every six months, you’ll need to budget about $67 every month.
Excited about finding this article on saving money…especially when you think you can’t. Seriously I have looked at our budget and we have little to zero each week to put back. We are doing something terribly wrong. I’m determined to find the “lost income” and make some needed changes. Saving IS A CHOICE. Thanks so much! Judy
Christina Brown says
I found that when I really started tracking my expenses, it became clear to me where there was room to save little bits of money. And if you’ve cut everything you possibly can, and still can’t find a way to save, then you’ll have to look for ways to increase your income (new job, second job, odd jobs, etc). Recognizing that saving is a choice is a BIG first step!