10 Reasons You're Having Trouble Saving Money

If you’re having trouble saving money, you’re not alone. An estimated 54% of Americans are living paycheck to paycheck, and less than 40% can afford an unexpected $1,000 expense. And with rising housing, healthcare, and education costs in addition to high inflation, those statistics are unlikely to change.

While it’s not always easy to develop a money-saving habit, there are some tricks to get started. Let’s take a look at 10 reasons you’re having trouble saving money and what you can do about it.

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If you’re not saving money, the first step you should take is to start tracking your expenses. You probably know how much money you make each month if you get a steady paycheck, but you might be surprised by how much you’re spending on discretionary items. This is spending after mandatory expenses like rent, food, gas, and utilities. Things like dinner and drinks out, entertainment, and clothes can take up more of your budget than you think.

Apps like Mint and You Need a Budget (YNAB) can help you get started tracking your expenses.

ALSO READ: 3 Ways to Boost Your Savings -- Without Downgrading Your Lifestyle

If you’ve started tracking your expenses or even if you haven’t, a good next step to take is to make a budget. Take the difference between your income and fixed expenses, and your budget for discretionary items should be no larger than that. If you can find a way to trim your fixed costs, then that’s even better.

Help yourself stick to it by tracking your expenses, finding less expensive ways of spending your time, and rewarding yourself for hitting your goal, in a nonmonetary or inexpensive way.

Make saving the first thing you do. Some investors call this paying yourself first. Each time you get a paycheck, put a predetermined amount like $50 into a savings account or an investment account. You can usually set this up through a direct deposit.

Building the habit here is the important part, not the amount of money that you save. Atomic Habits author James Clear advises to start small to make the habit easy. Once you’ve developed the routine of saving money every time you get paid, it will be easier to ramp it up. Start small. Make it easy on yourself.

Credit cards have a lot of benefits. You don’t have to worry about carrying around cash, and you can buy things before you need to pay for them. However, they also make it too easy sometimes to spend money, and swiping a credit card is a much different feeling than spending cash, and importantly you notice the cash balance leaving your wallet.

If you’re overly dependent on credit cards, try using only cash for a week for all of your in-person spending. It might remind you of the value of money, in addition to showing you how much you’re spending.

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We’re all guilty of a little retail therapy every now and then, but it’s easy to spend money on things you don’t need when you’re out shopping or online.

Much like spending with a credit card, online shopping eliminates much of the friction in shopping, making it easy to make impulse buys when you’re on Amazon or a similar site. A good rule of thumb if you find yourself shopping online too much or spending impulsively is to wait 24 hours to hit the buy button after you find something you like. Often, you’ll find that you only wanted to buy that item in the moment and it’s not something you need.

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Cutting back on costs is part of the equation to saving money, but adding to your income is just as important, if not more. If you’re not making enough money at your job, consider trying to negotiate a raise. Do your best to ensure that your performance has been strong before you make the ask, and prepare your talking points ahead of time.

Now is a great time to ask for a higher wage as there’s a national labor shortage, and if your boss doesn’t want to pay you more, you might easily be able to find a better-paying job elsewhere. Use resources like Glassdoor or Reddit to see how your pay might compare with that of a similar company.

Even if you’re well paid at your job and happy with it, you might want to look for another source of income. The good news is that these days there are more ways than ever to make some extra dough. Consider renting out your home on Airbnb when you go away or listing a spare room in your house if you have one. If you’re crafty, you can sell some of your goods on Etsy, or try to pick up some freelance work on Fiverr or Upwork. If you have a car, you can even rent that out on Turo. There also may be ways to help out your neighbors, doing things like dog walking or babysitting.

ALSO READ: Should You Take Your Side Hustle Full Time?

If you want to save money, your best bet to slash your expenses is to target the big-ticket items, which are usually housing, food, and transportation. While moving into a cheaper home may not be easy, you may be able to lower your housing costs by taking on a roommate, or renting out part of your house on a home-sharing site. If you live in a place that’s a popular travel destination, renting out your space can be lucrative, especially during high season.

If your mortgage payments are too high, you may be able to refinance, and you can try negotiating some rent relief from your landlord, depending on the circumstance, or exchange labor for a discount. You can also look into rental or mortgage government assistance programs.

Credit card debt is the silent killer of saving money, and if you have credit card debt, you should pay that down first before building an emergency fund or investing in stocks. If you’re dealing with high-interest credit card debt, consider transferring the balance to another card with lower interest, or even 0% APR for a short period of time.

If student loan payments are sinking your bank account, look into refinancing them for a lower rate, or consider taking a job that comes with student loan forgiveness.

Comedian Kevin Hart famously advised after spending time with wealthier friends to “stay in your financial lane.” That’s great advice and touches on one hidden reason why it’s so hard to save money. Often, we are just trying to keep up with our friends or the proverbial Joneses.

If your peer group spends more money than you can afford to, it may be time to find others to spend time with who are in your own financial lane. Similarly, spending money to impress others -- whether that’s on your car, clothes, jewelry, or something else -- is one of the easiest ways to ensure you’ll never have money to save.

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We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Getting started saving money is the hardest part, but if you build the habit and make small changes to your lifestyle, eventually you will start doing it, and thanks to the compounding nature of the stock market, that money will start growing for you once you invest it.

Whether it’s for your financial goals or your lifestyle, it’s always a good idea to have a few bucks saved for a rainy day. If you don’t already have one, now’s a great time to commit to saving up an emergency fund of at least three months’ expenses.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jeremy Bowman owns shares of Airbnb, Inc., Amazon, and Etsy. The Motley Fool owns shares of and recommends Airbnb, Inc., Amazon, Etsy, and Fiverr International. The Motley Fool recommends Upwork and recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.