The easiest excuse to make as to why you aren’t saving enough money is because you aren’t making enough money to put a substantial amount away. However, if you always make your outgoings relatively close to the amount of income you are making then saving money will always be problematic and your financial growth will continue to be stagnant as a result.
Identifying the reason you struggle to save will help you create the solution to your on-going problem. Once you figure out what is causing you to have minimum savings, you can work towards increasing them month-to-month. While we all have different financial responsibilities, we all should be making efforts to improve our circumstances so we can achieve our monetary goals.
Here are 5 reasons you may be struggling to save.
You Always Create Plans For Your Income
Every month when we have to calculate our outgoings we sometimes realise we have additional money left and then we use what we have leftover to change our plans or add new plans to our schedule. An example is someone making £1000 per month and their outgoings are £400. They could either live on £50 per week (£200 for the month) then put away the remaining £400 or they could live on £100 per week (£400 for the month) and then put £200 away. While we all want to live our lives to the fullest we also have to think about how the future and how we would like to be living in the next 5 to 10 years. It’s still possible to make plans and stick to a lower budget as creating discipline in that respect could be the difference in hitting your next financial goal in 2 years instead of 4 years. Live your life and make enjoyable plans with your future in mind.
You Use Your Credit Card Too Often
A credit card can be great for a number of reasons that can be found here. However, a credit card shouldn’t be used for everyday spending or for frivolous purchases such as clothes shopping. Of course, some purchases are helpful because it offers you purchase protection but this is better for products that hold value e.g. buying a Mac computer and it then gets stolen; using your credit card for this purchase means the purchase is protected.
Using a credit card is not free money and is not the same as a debit card because unlike a debit card, you will eventually have to pay the money you borrowed back to your lender. The money you are using to pay off your credit card could be used to save more instead.
Related: 5 Things That Affect Your Credit
You Haven’t Created Your Emergency Fund
There isn’t anyone that is exempt to an emergency occurring unexpectedly. From failing MOT and having to pay extra costs for your car to work making cutbacks and potentially being let go, these examples show that most unexpected situations come with unanticipated costs. The best way to deal with this proactively is to have an emergency fund to prevent you from having to dip into your savings to cover yourself. While it is suggested that 6 months worth your outgoings are best for an emergency fund, you can also work on building yourself up by starting with one month, then three months and before you know you’ll have a great financial cushion ready for any emergencies.
You Don’t Notice That Every Little Helps
The coins you keep in your clothes pockets, the products you pick up without thinking about the price difference at other supermarkets and the random outings you don’t plan for all add up whether you notice it or not. When you first get paid you may not notice how much things cost in relation to when you are waiting for payday. It’s important that you begin to care about prices and look for discounted deals because it can be the difference between £50 in savings when you actively try to make your money go further by spending less. Don’t wait until your income is low before you realise the importance of being careful in how you spend your cash.
You Don’t Budget
Whether you use an app, a spreadsheet, the notes section on your phone or a pen and paper, budgeting is really important in helping you save more. If you have no idea how much you are spending on eating out, it is very easy to eat out into your phone bill. Setting a budget can often be seen as something that limits you but it actually gives you better control of your money situation. You can still budget and spend some of your income on what you want so make a list of what you can afford to save and what you can afford to spend remembering to make saving just as important as spending.
Related: Tips To Stop Overspending
This post was written by Bola.