15 Reasons You Can’t Save Money

If you can't save money, it's because you're living beyond your means. Not budgeting, being in debt, not making savings a priority, and other factors contribute to being unable to save. You can solve this by reducing your expenses, changing spending habits, and finding ways to earn more income.

Couple examining their bills.
Reasons you’re unable to save cash.

Why Can’t I Save Money?

Ever feel like you can’t save money? At the end of the month, do you look at your bank balance and wonder, “Why can’t I save money?”

You are not alone. According to a recent Bankrate survey, 56% of American adults don’t have enough savings to cover a $1,000 unplanned expense.

Saving money isn’t easy, but it’s not impossible. Once you figure out why you’re not saving and make changes, you can save a lot more money.

15 Reasons You Can’t Save Money

Here are some common reasons that might explain why you can’t save money and some tips to help you start saving money faster:

1. You Don’t Budget Your Money

Consistently saving money is only possible if you have a plan. A budget is that plan.

By not budgeting, you could end up:

  • Living beyond your means
  • Wiped out by an unexpected expense
  • Deep in debt
  • Paying hundreds in overdraft and late fees
  • Being unable to retire

Before I sat down and created my first budget, I felt I had a good handle on how much I spent. I was wrong. What I thought I spent and what I actually spent were miles apart.

When I was finally sick of being broke, I started tracking my spending, created a budget I could live with, and watched my savings grow. You can, too, once you know how much is coming in and where it all goes.

2. You Overspend

Living below your means is one of the essential principles of personal finance and wealth building. Spending less than you earn is a simple concept. Putting it into practice can be complicated.

Creating a budget is an excellent first step toward curbing overspending. Sticking to it is the part that will free up extra cash to put toward your savings.

Exceeding the limits you set for a particular expense or expense category will prevent you from saving for the future. Putting things on your credit card instead of saving up for them leads to financial ruin.

Once you’ve made a budget, you can look for ways to lower or eliminate some of your expenses. Take a hard look at your discretionary spending. You can probably find a few things you could cut back on without being miserable.

It’s not just bad spending habits and unnecessary purchases, though. Go over your bills. You might be able to reduce your housing costs, grocery bills, insurance premiums, or spending on other basic needs by shopping around.

If you could find a new apartment in the same neighborhood for $100 less per month, you would free up $1,200 for the year without changing your lifestyle. Comparison shopping for car insurance, cell phone plans, and groceries could free up extra cash.

Once you get your spending under control, you can start saving money regularly.

3. You Don’t Have a Clear Line Between Needs and Wants

Needs and wants are two very different things.

A need is something you can’t live without. Food, shelter, clothing, and medicines are necessities and examples of needs.

A want is something you would like but isn’t needed for living. Expensive jewelry, high-end cars, and luxury vacations are not necessary to live. 

While it sounds simple enough, the line gets a little blurry sometimes. It’s easy to convince ourselves that we’re buying something we need when it’s a want.

For example, you need clothes. But you don’t need to cover yourself from head to toe in designer labels. When you spend a month’s salary on a single outfit, you may justify it by telling yourself that you needed it for work or that you got a great deal.

NeedWant
An evening mealTakeout from your favorite restaurant
A winter coatAir Jordans
Reliable transportation to workA fancy sports car
Affordable housingA three-bedroom house with a pool

When you can control your spending on your wants, you’ll have more money to save for your future.

4. You Don’t Have an Emergency Fund

Emergencies can happen to anyone at any time and usually come with a price tag. The cost of an unexpected expense can be enough to throw your finances into chaos if you’re not prepared.

Being prepared means having 3 to 6 months of living expenses stashed away in an emergency fund you can access when the need arises. If you don’t have an emergency fund, you may struggle to cover an unplanned expense. An emergency might force you to turn to high-interest credit cards, empty your savings, or take out a loan.

Not having an emergency fund threatens your financial stability and security. Saving goes out the window.

Starting an emergency fund is an excellent first savings goal once you figure out why you can’t save and work on fixing it.

5. You’re Carrying Too Much Debt

Carrying debt makes it difficult to keep up with your living expenses and grow your savings. Student loan debt, car loans, credit card debt, and other debt obligations weigh you down. When several monthly payments to creditors are hanging over your head, saving tends to fall by the wayside.

When you have high-interest debt, paying it down first will help you solve money management problems and eventually put more money in the bank. Try doing what personal finance expert Dave Ramsey suggests: do what you have to do to put $1,000 aside in case of emergency, then focus on getting out of debt. 

6. You Don’t Make Enough Money

Person using a calculator and a notebook to evaluate their finances.

If your budget is already stretched thin and you’re barely scraping by, saving might not be possible. Sometimes neither the economy nor your spending habits are to blame. You simply don’t have enough income to afford your expenses.

You might be able to trim your spending enough to start saving for your financial future. But there comes the point where you can’t lower your spending anymore.

Your living expenses will never be zero. You’ll always need food, shelter, clothing, and medical care. If you can’t cut spending, your other option is to make more money.

You can do that by:

Making more money is easier said than done, but there are opportunities to increase your monthly income. And earning more can solve a lot of money problems relatively quickly.

7. Your Cost of Living Is Rising

Wasteful spending isn’t always the problem. Prices for food, housing, gas, utilities, and education increase over time.

It’s challenging to keep up with the rising monthly expenses and grow your savings if your earnings aren’t growing at the same rate or faster.

Even slight upward changes to your cost of living, like a slight rent increase, can prevent you from saving money when you live paycheck to paycheck.

You can’t control inflation or economic downturns. What you can do is:

  • Cut discretionary spending. Takeout meals, entertainment, and impulse buys might be costing you hundreds monthly.
  • Audit your bills. You might be paying for things you don’t need or use, like cell phone insurance or streaming services.
  • Consume less. You can save on utilities and transportation by changing your usage patterns.
  • Find a way to make more money. Start a side hustle, get a part-time job, or change jobs.
  • Consider moving. Relocation is a radical solution and not feasible for everyone, but there could be a suitable place with a much lower cost of living where you could thrive.

Some factors that contribute to rising costs are out of your hands. How you deal with your rising costs determines whether you can put money aside and how much. 

8. You Buy Things You Don’t Use

I used to have a thing for kitchen gadgets and golf equipment. I did not become a better chef or a great golfer, but I wasted a lot of money. If it weren’t for our occasional garage sales, all that barely used stuff would be sitting in our basement collecting dust.

The biggest wastes of money are more than just household items or physical products. Unused subscriptions or memberships, not returning regrettable purchases to the store, and food waste can cost you hundreds of dollars a year.

Think before you buy. Do you see yourself using the item for a long time, or can you see it sitting unused in the back of a closet? For perishables, are you sure you can use it all before it spoils or expires?

You may be able to start saving money by cutting down on waste and unnecessary purchases.

9. You Lack the Motivation To Save Money

Saving money because you’ve been told it’s a good idea probably won’t provide enough motivation to keep at it long-term.

It’s easy to lose motivation and quit saving when life throws you a curve. When things are going well, saving for a rainy day might be the furthest thing from your mind. A well-defined reason for saving makes it easier to stay on track through financial ups and downs.

Your motivation for saving money can be anything you want it to be. Maybe you want to:

  • Buy a house
  • Start a family
  • Retire in 10 years
  • Travel
  • Renovate your bathroom

Think about the consequences of not saving money, like not having any freedom and being unable to retire. Figure out why you want to save money and set some SMART financial goals.

Whether you put money away for financial security or something fun, choose savings goals that will help you stay motivated to save regularly.

10. You Make Impulse Purchases

Fashionable woman holding several shopping bags.

Everywhere we look, advertisers are bombarding us with marketing messages. Retailers use clever tactics to get you to buy more, like putting expensive items at eye level, offering free samples, and lining the checkout counter with candy, magazines, and other cheap stuff.

It’s all intended to trigger you into buying and making bad financial decisions. And it works.

Impulse buying is probably costing you a lot of money if:

  • You feel like you can’t resist a bargain
  • Your shopping trips often cost more than you planned
  • You come home with stuff you had no intention of buying when you left
  • You shop as a form of relief from boredom or stress

Here are a few tips for eliminating impulse buying:

  1. Make a list and stick to it.
  2. Leave your cards at home and bring only the cash you need to cover your list.
  3. Don’t shop when you’re hungry or emotional.
  4. Shop no more than once a week.
  5. If you’re tempted by something that’s not on your list, wait at least a week.
  6. Unsubscribe from store email lists.
  7. Toss the catalogs, mailers, and other junk mail without looking.

11. You Don’t Prioritize Saving

If your approach to saving is to wait until the end of the month when all your necessities are taken care of, your bills are paid, and all your discretionary spending is done, chances are you don’t save very much. Or you don’t save anything at all.

Include savings in your budget and treat it like any other monthly bill. Take care of it every month.

12. You Don’t Pay Yourself First

Paying yourself first means putting a percentage or a fixed amount of your paycheck in a savings or investment account before you spend money on anything else. That makes saving your top priority.

One of the best ways to ensure that you save money every month is to automate your savings. Set up automated transfers to a savings account or other savings vehicle to coincide with your paydays.

You can also contribute to your 401(k) if your employer offers one. Try to put in enough to get the full match. The money comes out pre-tax so you won’t miss it.

13. You Keep All Your Money in Your Checking Account

Your checking account is a safe place to keep your spending money. It’s not the best place for your savings, though.

By keeping all your money in checking, you’re missing out on earning interest and opportunities for growth. It’s tempting and easy to spend down to zero if all your money is in one place.

Open a separate savings account that isn’t linked to your checking account. You’ll think twice if transferring money to your checking account requires more effort.

14. You’re Experiencing Lifestyle Creep

2 champagne glasses on a ledge overlooking the ocean.

Lifestyle creep is when more income results in more spending. As you move up and start making more money, you may feel justified spending more on a bigger place, a fancier car, and more luxuries. If you cannot save, upgrading your lifestyle as soon as you get a raise or a windfall is a financial mistake.

Making more money isn’t a bad thing. But more money won’t help grow your savings or get you out of financial danger if your spending goes up in step with your pay increases.

When you get a salary bump or chunk of money, maintain your current lifestyle instead of spending more. Bank the extra money until you get your finances on track.

15. You Care Too Much About What Other People Think

Trying to gain acceptance, approval, or social status through material goods is unhealthy and not financially sound. You can’t buy genuine friendship and admiration. You can’t save money if you constantly try to outdo or outspend your friends and neighbors.

The next time you compare your stuff to someone else’s, ask yourself if buying something more expensive or bigger is worth it. You’ll realize it’s probably a wrong decision. Remember that saving for your future is more important than unhealthy competition or impressing others.

Before You Go…

Understanding why you can’t save money is half the battle. Instead of feeling helpless or guilty, examine your spending habits, review your budget, and think of creative ways to save money. To help you do that, check out these 16 Tips for Building an Aggressive Savings Plan.

Image Credits: Unsplash

Jerry Graham

Jerry Graham

Jerry is a personal finance enthusiast, side hustler, and freelance web developer who began his career in financial services. He co-founded KindaFrugal.com, a personal finance and frugal living blog. His insights have appeared on MSN, Newsweek.com, HerCampus.com, Mashed.com, and many others.