Are you broke and can’t save money? Can’t work out the reasons you can’t save money? I so often hear people saying that they have no money, and can’t work out why. Sure, there are situations where there isn’t even a spare cent left, but often there are little leaks in people’s budgets that make it appear that they have no money. But with a few small changes, they manage to find a spare few hundred dollars each month.
You can’t avoid the fact that life costs money. Between paying rent or a mortgage, all the utility bills that go with living in a home along with food, clothes and car expenses, it can leave very little left for anything else. But sometimes there are ways we could save money that we wouldn’t notice without a little outside help.
Even though it’s unpleasant, sometimes we just need to confront our financial situation front on, and make a plan to get out of that financial rut. These 10 reasons why you can’t save money will help you do just that.
You treat your credit card as though it’s an income source
If you get a new credit card and automatically treat your available balance as though you have just scored a windfall of cash, credit cards are not for you. If you have had a credit card for a while, you might even start to treat the credit card balance as though it’s your very own money. There are so many reasons why this is not a good idea!
If you are finding you just can’t get on top of the credit card bill, which is in turn meaning you can’t save any money, it’s time to ditch the credit card for good. Start by cutting up the card (so that you can’t use it any more), and start throwing as much money as you can on that credit card balance. I guarantee you will feel on top of the world once you pay off the balance in full and make that phone call to close the credit card account.
You feel like having a debt is ‘normal’
If most people in your life have a debt of some form, you might start to feel like having a debt is normal, and therefore ok! It’s not. You might start to compare your level of debt to friends and family, and tell yourself that as long as your debt isn’t any higher than theirs you are doing totally fine.
Other people might make debt seem normal, but chances are it’s causing them many sleepless night. Never compare your finances to someone else’s, and instead stay focussed on your own. If you have debt, it means that you are spending more than you earn, and that can’t go on indefinitely.
You can worry about your debt later in life
If you are in your 20’s or 30’s, you might feel like you have the rest of your life to pay off your debt and start saving money. After all, who wan’t to spend their younger years paying off their debt instead of living their lives? But is it really worth paying nothing off your debts now just so you can spend more on clothes and eating out? Chances are in 10 years you won’t even remember those clothes, but you will still have that debt following you around, and it will probably be a much bigger debt by then.
You also don’t know what’s going to happen between now and then. You might get sick or lose your job, which is going to make it pretty hard to pay that ever growing debt.
Why not do both? There are so many reasons why you should deal with your debt now and not in 10 years time, and it’s perfectly possible to pay off debt while still having fun. Paying off your debt does not mean you need to suffer until the debt is gone. You don’t have to put every last cent towards your debt (although you could have it gone in no time if you did), but just put something extra towards it. An extra $10 a week is going to put you in a much better position that if you pay nothing extra at all!
You are paying for tv when you actually can’t afford it
Pay tv, like Foxtel here in Australia, can be crazy expensive. I hear so many people talk about calling Foxtel to try get discounts on their tv service, because they need to put that money toward other bills. Why not just cancel the service all together? There are Foxtel packages for $99 per month, which is $1188 every year! That’s a lot of money to be paying simply to watch tv.
There are much cheaper and even free alternatives to Foxtel, so why pay such a massive amount for tv? If you really feel like there is nothing to watch on free to air tv, try a streaming service like Netflix or Stan. We have a Netflix subscription which costs little more than $10 per month, and can be watched on multiple devices in our house.
When it comes down to it, if you are struggling with other bills or carrying debt, you really can’t afford pay tv.
You buy things because you feel like you deserve it
How many times have you told yourself you work hard, therefore to deserve to spoil yourself. It’s fine to splash out on occasion, but not when it’s on things you can’t actually afford.
You might see others buying big flashy new appliances and tell yourself that you earn around what they earn, therefore you should buy yourself that new appliance as well. The thing is you have no idea how they paid for that item. They may have saved and paid cash for that item, but they also could have put it on the credit card.
If you continuously tell yourself you deserve everything everyone else has, you are going to have no money, and probably a nice debt to go along with it. Sometime people look successful from the outside, and appear to have everything including the expensive house and car and plenty of nice things inside it. But on the inside, they are actually mortgaged to the max and incredibly stressed and miserable.
You have a car loan
If you have a car loan, have you every worked out how much you will pay in interest over the life on the loan? Once you add interest into your loan repayments, that car is going to cost you a whole lot more than the initial purchase price. Unfortunately once you have paid off the car loan, your car is going to be worth a whole lot less than the purchase price, let alone the purchase price plus interest.
Car loans are one of the quickest ways to make yourself poor, especially when you pay off one car loan and go straight into upgrading your car using yet another car loan.
The truth is you should never buy a car unless you can pay for it with cash. If you can’t pay cash, you really can’t afford that car, and should either keep saving or start looking at cars that you can pay cash for.
You have your wants and needs confused
Spending endless money on ‘wants’ that you think are actually ‘needs’ could be the reason why you can’t save money. Sometimes you need to take a step back and have a good look at which of your spending habits are ‘needs’, and which are just ‘wants’.
There are some ‘needs’ that are absolute essentials, like a house to live in, food on the table and warm clothes to wear. These are expenses that should always come first. But others like eating out, gym memberships and a home way bigger than you actually need are ‘wants’. They are not essential for your wellbeing, and are only things you should be spending money on if you have the spare cash.
It’s a great idea to put aside some money for the ‘wants’, but sometimes we need to realise that unless we increase our incomes, there just isn’t enough money to cover every single ‘want’.
You don’t have goals
Most people that have a decent amount of money saved up have goals. It’s really hard to feel motivated to not spend every cent of your income if you don’t have some sort of future goal. You might feel as though you have nothing to save for or don’t have the ability to save, so why try?
I find goals are a great way to help me save. Deciding on a goal, whether it’s short term or long term (or both), is the best motivator to save. When I find myself thinking about spending money on something that’s not essential, I often think back to whatever my goal happens to be at the time. More often than not, I decide that it isn’t worth spending money on random ‘stuff’, if it’s going to cost me my goal.
You don’t check your bank statement
When was the last time you check your bank statement to see just where your money is going? Not paying attention to your bank statement could mean small expenses like subscriptions you don’t actually use, are going unnoticed. It’s easy to not notice small amounts like Spotify subscriptions coming out of your bank account each month, but a few of these small amounts soon adds up to a large amount of money.
Once a month, have a quick glance over your banks statement. Look for any ongoing subscriptions that you don’t actually use any more and cancel them.
Do you find yourself upgrading your lifestyle anytime you get a pay rise, no matter how small the raise is? It’s so easy to do, and one of the biggest reasons why people never get in front, despite their income increasing over time.
Next time you get a pay increase, be sure to put aside the difference in pay as soon as you receive it each payday. If you pretend the extra money isn’t there, you might not be as tempted to spend it.