Why You Can't Save Any Money: 10 Reasons + Solutions

Managing your budget can be challenging, especially with increasing prices today. Even if you don't live paycheck-to-paycheck, you may find that you cannot save money. You aren't alone; over 37% of Americans cannot handle an emergency expense over $400, and 21% of Americans have no savings.

If you're wondering, "Why can't I save money? " Here are the top reasons why and some solutions that may help.

1. Not Tracking Your Spending

If you feel like you have no idea where your money went at the end of each month, you likely aren't tracking your spending. This means tracking every penny you spend; it all adds up. Tracking your spending may feel intrusive or burdensome, but it helps you understand where your money goes and where you can cut back.

The fix: You can track your spending using a budgeting app, spreadsheet, or even pen and paper. The key is to track your spending daily or at least weekly so you always know how much you should and should not spend.

2. Not Paying Yourself First

It sounds silly to pay yourself first, but if you aren't, it could be one of the main reasons you always say, "Why can't I save any money?" When you pay yourself first, you put money in a savings or investment account as soon as you get paid rather than spending all month and putting savings last.

The fix: Set up automatic transfers, either from your checking account or via direct deposit with your employer. This will take the work out of transferring funds and ensure you save money before you spend it.

3. Keeping all your Funds in One Account

It's tempting (and easy) to keep all your money in your checking account, but it's just as easy to spend your funds there. Instead of leaving the money there, have a separate account, possibly at a separate bank, for the funds you want to save. This makes it much harder to spend the money without thinking.

The fix: Open a savings, CD, or money market account at a bank other than where your checking account is. Use this account to store funds you intend to save. If you need the money, you can withdraw it, but it will be much harder to use the funds for unnecessary purchases.

4. Your Bills are Too High

You may be living beyond your means and not realize it, making your house or car poor. Even though your monthly payments seem low compared to the overall cost, they can interfere with your ability to save money, leaving you in dire circumstances if you have an emergency.

The fix: You don't have to run out and sell your house or car, but you may want to consider refinancing your loans to leave you with a little more breathing room in your budget especially if it's family budget. But if your house or car makes it impossible to save at least three months of expenses, selling one or the other may be in your best interest.

5. You Have too Many Debts

Even 0% interest debts can get in the way of your ability to save. If you wonder, "Why can't I save money?" look closely at your debts. Have you recently taken on a new credit card or signed up for a buy now, pay later deal? Even small payments can get in the way of your ability to save for the future.

The fix: Stop opening new credit card accounts and pay down your debts as quickly as possible. Any balances you pay off free up room for potential future savings.

6. You Make Impulse Purchases

If you don't make lists when you shop (and stick to them), you likely purchase things that you didn't budget for, which can hinder your ability to save. Even small purchases add up and can make reaching your financial goals challenging.

The fix: Make a list and stick to it. If you find something you want that you didn’t plan, wait and budget for it so that you don’t get in over your head.

7. You Over-Save in Your Retirement Plan

Everyone should save for retirement, but not at the expense of being unable to afford their current expenses and running up credit card debt. Maxing out your retirement plan isn't necessary if you're struggling to make ends meet or think, "I can't save money" for current emergencies.

How to fix it: Reevaluate your retirement savings contributions. Contribute at least as much as you can to get your employer match, but ensure you can meet your current expenses. If you don’t want to reduce your retirement plan contributions, see where you can cut back on spending and expenses.

8. You Let Lifestyle Creep Happen

It's natural to earn more money as time passes, but that doesn't mean you should also spend more money. Before you know it, you inflate your lifestyle to the point that you cannot keep up with your regular bills and are unable to save.

How to fix it: Rather than increasing your spending, increase the amount you save every month. If you have automatic savings set up, increase the amount according to your raise or new income so that you save more and spend less.

9. Not Having an Accountability Partner

It's much harder to overspend when you have to answer to someone, whether a spouse, friend, or financial professional. Knowing you have to confess your latest spending spree may make you think twice before spending.

How to fix it: Get your spouse, friend, or financial professional on board to help you stay the course and reach your financial goals.

10. You Focus on Material Things

Material things don’t make your self-worth. Stop worrying about what other people think about you and ensure you have financial stability over material things. You never know what debts the people around you have, even if it seems like they have it all; they may also have a ton of debt.

How to fix it: Keep your eye on the prize: financial stability. You won't have more friends, or people won't like you more just because you own more things. Instead, focus on saving money versus buying material items.

Final Thoughts

Thinking, "I can't save money," is the first step to fixing the problem. Knowing you spend more than you save or that you don't make enough to save is important. The next step is tracking your expenses and figuring out how to change your habits. Consider an app like Spendings.IO to help you start your journey to a better financial path!