Reasons You’re Broke And Can’t Save Money

Do you feel like it’s impossible to save money? Like I can’t save money to save my life? Here are The Reasons You’re Broke And Can’t Save Money however hard you work.

Have you ever felt like no matter how hard you try, you just can’t save money? Do you feel like, every time you try to take a step forward in your financial life, you get hit with an unexpected expense that sets you two steps back?

Reasons You’re Broke And Can’t Save Money

1. You Are Paying Too Much Rent

I can attest that the cost of rent is pretty ridiculous right now. And it just keeps getting worse. Like paying too much for a mortgage, it can seriously hinder your ability to save money.

As a general rule of thumb, you should only be spending 25% to 30% of your take home income on rent each month.

So, if your rent is higher than that, and you can’t afford to save money, then you might want to consider finding a new place to rent.

2. You Don’t Live On A Budget: Reasons You’re Broke And Can’t Save Money

If you can’t seem to save any money, and you aren’t living on a budget, then now is the time to start.

Budgeting is an absolute necessity if you want to start, or increase the amount of money you save each month.

Budgeting is the best way to plan your financial life and track your progress. If you aren’t doing that, then how do you expect to save money?

If saving money is a priority, then go create a budget right now, and start actively managing your money.

3. You Don’t Have a Budget, So You Have No Money

If you don’t have a budget or if your budget is not a good one, then this can be a big reason for why you have no money.

A good and realistic budget can help a person and/or a family manage their money better. Yes, a simple piece of paper where you jot down your budget can actually do this.

A budget can help you realize where you might be going wrong with your finances and how to fix a financial issue that you may be having.

Many people are afraid to create a budget because it means that they will have to actually face their spending. If this is why you don’t have a budget, then please, just face your fears and start creating one today.

4. You Are Dining Out Too Often: Reasons You’re Broke And Can’t Save Money

If you are wondering where your money is going each month, and why you can’t save any of it, then you might be dining out too often.

For example, when my wife and I are really diligent about grocery shopping and meal-planning, we will spend a total of about $500 per month on food.

Whereas, if we were to get lazy, and dine out more than we should, we wouldn’t have any problem blowing our monthly food budget.

Dining out is tasty, fun and easy, but if you aren’t careful, it can be a major blow to your savings.

5. You Have Credit Card Debt

Credit card debt is one of the worst things you can allow into your financial life. Reasons You’re Broke And Can’t Save Money

Between the ease of spending beyond your means, and the high interest rates that suck money from your life, credit card debt makes saving money a much more difficult task.

Additionally, credit card debt has a way of lingering in your life for a very long time.

What starts out as a small, seemingly innocent, balance starts to add up, and before you know it, your minimum payments, alone, are costing you hundreds of dollars per month.

Every dollar you pay to a credit card company is a dollar that you can’t put toward savings. So, if you want to save money, stop using your credit cards and put an end to this vicious cycle.

6. You Treat Your Credit Card as Income

Your credit card is not a new income source. If you treat your credit card this way, then you should cancel your credit card as you are going into unnecessary debt.

If you are using a credit card, then you should be working to completely pay off your balance each month so that you are not racking up interest charges and late fees.

7. You’re Unprepared For Emergencies And Unexpected Expenses

Unexpected expenses can be one of the most defeating aspects of saving money. Like I said at the beginning of this article, it’s like getting knocked back two-steps after taking one step forward. Reasons You’re Broke And Can’t Save Money

But truthfully, the term ‘unexpected expenses’ is a bit of a cop-out in my opinion. Why?

Because unexpected expenses (i.e. medical bills, car repairs, home repairs, etc.) are a fact of life, and you should EXPECT them to pop up now and again.

8. You Lack A Good Understanding Of Personal Finance

Handling your finances properly — so that you can save money — is not a natural skill. In other words, you aren’t just going to wake up one day and suddenly start making great financial decisions.

If you want to be good with your money, you need to learn how to be good with your money.

That means you need to invest time and energy into researching and educating yourself on personal finance.

So, crack a book, follow some personal finance blogs (preferably this one), or take a personal finance class. Whatever you choose, just make it your business to learn the ins and outs of handling your money.

If you don’t know where to start, I highly recommend you read The Total Money Makeover by Dave Ramsey.

This is the book that turned my financial situation around, and it is a great starter’s guide to getting out of debt, saving money, and building wealth.

9. You Have Student Loan Debt: Reasons You’re Broke And Can’t Save Money

According to the Federal Reserve, the typical student loan payment is between $200 and $299 per month. (source) And, for some people, it is much higher than that.

In other words, student loan debt is a crushing blow to your ability to save money. Similar to a car payment, it can consume a massive portion of your monthly income.

And the longer you let that debt stick around, the longer you will struggle to save money. Student loans could be restricting your ability to save by upwards of $3,600 per year.

10. You Make Excuses For Why You Have No Money

Everyone is guilty of making excuses, and I know that people will continue to make them until they realize that excuses are just that- excuses.

Just think about the last time you said “That won’t work for me because (insert your excuse here).”

As a personal finance expert, I hear a lot of reasons for why a person can’t save money, pay off debt, live the life they want, reach retirement, and so on.

There are plenty of legitimate reasons for why some people have financial setbacks, but there are still many people making excuses for why they can’t achieve their goals or why their life is bad.

The problem with making excuses is that this bad money habit can hold you back, which means that you may never reach your financial or life goals.

To put it simply, excuses prevent you from living the life you want. You’re giving up before you’ve even begun.

11. You Believe You Deserve The Items You Buy

Yes, you may be awesome and think you deserve something, but should you really be buying it?

Just because someone else bought a 100 inch 3D TV (or a mansion, nice car, gadgets, paid for a crazy-expensive wedding, etc.) that doesn’t mean you should as well.

You might think “oh, well they have a comparable job to mine, so, if they can afford it, then I can too.”

However, you have no idea how this person is paying for it. Maybe they saved for years, or maybe they are just putting everything on their credit card.

By thinking that you deserve everything, you are making yourself have no money. Instead, you should be realistic with your financial situation and only buy what you can truly afford.

12. You believe you have lots of time to pay off your debt

I remember being asked why I wanted to get rid of my student loan debt at my age (I was 25 when I paid off my debt).

I still remember the person saying something about how I’m young and should enjoy my money more now and that I can worry about my student loans later.

UMM, WHAT?!

Why not just pay off more of your debt now? Would you really rather have that 100th pair of jeans instead of putting more towards your debt?

I know for a fact that I am extremely happy to have paid off my Student Loan Debt.

I still enjoyed my life while I was paying off my debt, and I definitely do not think I was suffering at all.

Plus, there are many other reasons to pay off debt now rather than later, and one of the biggest is that you just never know what may happen in the future.

If you wait to pay off your debt and instead spend your money on things that you don’t need, you may fall into a bad situation.

What would happen if you lost your job, came across high cost medical bills, or something else? Wouldn’t you have wanted your debt to be gone?

By waiting to pay off your debt because you think you will have time later to do so, you could be negatively impacting your financial situation.

If you have the means to pay off your debt now or, at least, work towards paying it off, then you should make the effort as soon as you can!

13. You Confuse Wants With Needs: Reasons You’re Broke And Can’t Save Money

Wants and needs are very different things. And if you can’t seem to save any money, then you might be confusing the two. And honestly, at times, the difference can be subtle.

For example, when I was fresh out of college, I built and sold custom furniture as a side business. And in order to build furniture, you need to own a few key tools.

However, I blurred the line between want and need, and used my side business as an excuse to buy just about any tool I wanted — even when I had all the necessary equipment to build furniture.

I would convince myself that I needed each new tool, because it would help me make and save more money. Yet, every dollar I earned just went toward the next tool.

What I NEEDED was to get a clue and stop spending all my money.

14. You Pay Too Much For Your Cell Phone

Most people overpay for their cell phone plan. If you can’t afford to pay your bills, pay down your debt, and so on.

Then you should look at either getting rid of your cell phone (yes, this is possible and some people do go without cell phones) or finding a more affordable cell phone option.

If you are looking for an affordable cell phone service, check out Republic Wireless. They have monthly cell phone plans as low as $15 per month.

15. You Are “House Poor”: Reasons You’re Broke And Can’t Save Money

Most people don’t like to admit that they bought more house than they can afford. But if you are putting more than 25% of your monthly income toward a mortgage, and you can’t seem to save any money, then truthfully, your house is the main culprit.

This is often referred to as being ‘house poor’. And it is a major hindrance on your savings.

Throw a car payment and some credit card debt on top of it, and your opportunity to save money walks out the door.

Now, just to be clear, I am not telling you to sell your house. That is a very unique and personal decision.

I’m just saying that if you are wondering why you can’t save any money, you should take an honest assessment of your mortgage, and determine if it is restricting your ability to save money.

16. You’re Paying For Cable When You Can’t Afford It

According to NPD Group (a market research company), the average monthly cable bill is around $120. By the year 2020, the average cable bill is expected to be around $200 a month.

If you can’t afford cable, then you shouldn’t be paying for it. It’s really that simple!

By paying for cable when you can’t afford it, you are preventing yourself from saving more money. This all leads to you having no money.

You can read more about cutting cable and how to save money by doing so. I recommend getting a Digital Antenna so that you can receive local channels for free!

17. You Owe Money On Your Car: Reasons You’re Broke And Can’t Save Money

Did you know that the average car payment in America is over $500 per month? And the worst part is, loan terms are getting longer and longer.

Like credit card debt, if you are making monthly car payments, you are heavily restricting the amount of money you can save.

Think about it, if you are paying $500 per month on a car payment, you are sacrificing $6,000 per year in savings. That’s a significant amount of money.

You could go on two or three really nice vacations every year for that amount of cash.

Or, you could throw that money into an emergency fund, and finally get ahead of some of those unexpected expenses.

You could even contribute that money to your retirement, and watch it grow for the next couple decades.

Cars payments make saving money difficult. So, if you want to save money, you should pay off your car, or even consider selling it. A nice set of wheels isn’t worth sacrificing your financial security.

18. Your Car Is Too Expensive

According to Edmunds.com, the average person in the U.S. spends $483 on a new car payment and $361 on a used car payment.

Yes, I was just as shocked when I read that statistic!

This is sad especially when considering that many take out high-interest rate loans in order to make their car payments.

Back when my husband worked in new car sales, he often told me about new car buyers with car loans at interest rates of 20% and above.

While $479 a month may be affordable to some, I’m going to assume that it’s a lot of money for most people.

Plus, once you add in gas, maintenance, insurance, taxes, registration costs, and more, the number is going to be much larger.

If you’re spending too much money on your car expenses, then this can lead to you having no money.

I think everyone should buy a car that they can actually afford. I am a big believer that your total car expenses should be less than 10-15% of your monthly income in order for it to be affordable.

19. You Don’t Have An Emergency Fund

By not having an emergency fund, you may be causing yourself to have no money. Reasons You’re Broke And Can’t Save Money

An emergency fund is something everyone should have. However, according to a report by Bankrate.com, 26% of Americans have no emergency fund whatsoever.

This can impact a person negatively and leave them with no money for the times when they truly need it.

According to this same report, only 40% of families have enough in savings to cover three months of expenses, with an even lower percentage having the usually recommended six months worth of savings.

This is frightening to me, as having an emergency fund can greatly help a person get through tough parts in life.

Emergency funds are helpful in situations such as:

An emergency fund can help you if you lose your job. No matter how stable you think your job is, there is always a chance that something could happen when you will need money fast. What would you do if you lost your job and didn’t have an emergency fund?
An emergency fund is a good idea if you have a car. You just never know when it will need a repair.
An emergency fund is necessary if you own a home. One of the lucky things that homeowners often get to deal with is an unexpected home repair. Having an emergency fund can help you if your basement floods, if a hole in your roof forms, and more.
An emergency fund can protect you in many other areas as well. This includes medical costs for you or your pet, needing to take time off of work, wanting to visit a sick loved one or friend, and so on. The list of reasons for why you might need an emergency fund can be long.

How To Start Saving Money: Reasons You’re Broke And Can’t Save Money

Ok, at this point, we have identified a bunch of different reasons why you might be struggling to save money. Now, let’s talk about how to turn things around.

In this next section, I am going to cover a few tips to help you fix your financial struggles, and finally start saving money.

I’ll warn you though, when it comes to personal finance, there is no such thing as an easy fix.

Conquering your inability to save money takes work, sacrifice, perseverance, and discipline. If anybody else tells you differently, they are lying to you.

That said, if you are willing to do the work and fight to improve your financial life, the rewards are worth the effort.

a) Stop Playing Financial Defense

If I’m being honest with you, I tend to be a little impatient when it comes to personal finance. Reasons You’re Broke And Can’t Save Money

When my wife and I set a financial goal, I would rather work twice as hard in order to achieve it in half the time, than stick to a slow timeline. In other words, I hate playing financial defense. I like to attack.

And, if you want to turn your financial situation around, you need to adopt an offensive — attack-style — mindset.

That means committing and sticking to your financial responsibilities like budgeting, paying bills, earning an income, and paying off debt.

It means charging full-speed ahead, and taking daily steps to improve your financial situation. And above all, it means persevering through difficulty.

When you decide to attack your financial goals, you will be amazed at the results you can achieve.

b) Get Your Spending Under Control

Hopefully this goes without saying, but if you can’t save money, you need to get your spending under control. Reasons You’re Broke And Can’t Save Money

It doesn’t do you any good to go through life complaining about how you can’t save money, if you aren’t willing to change your financial habits.

At the bare minimum, in order to get your spending under control, you need to get on a budget, track your spending every single day, and cut your expenses to the bone.

And I’m not talking about dropping a couple small subscriptions and turning off lights more often so that you can lower your electric bill.

I’m talking about cutting every unnecessary expense from your budget until you are out of debt and prepared with a six-month emergency fund.

c) Destroy Your Debt (For Good): Reasons You’re Broke And Can’t Save Money

If you have any kind of debt, pay it off as quickly as you can. Every dollar that goes toward debt is just another missed opportunity to save money and better your financial situation.

And if you aren’t able to save any money, then you need to do whatever it takes to add a little financial margin in your life. I’m talking shock and awe.

If you are drowning in credit card debt, shred those money-sucking pieces of plastic and get to work paying them off.

If you can’t save any money because you are spending hundreds of dollars on a car loan, then sell the car and buy a cheap, used car instead.

You don’t need a navigation system and a backup camera. What you need is an emergency fund, and a growing net worth.

Get aggressive with your budget, and pay off your student loans. Your college education was supposed to increase your earning potential, not bury you in monthly payments for a decade of your life.

Any debt you have is hurting your financial future, so get rid of it as fast as possible.

d) Save Money First: Reasons You’re Broke And Can’t Save Money

If you want to save money, then make it the highest priority on your financial list. In other words, the moment you get a paycheck, decide how much of it you want to save, and move the money into your savings account. Then, live off of the remaining money.

Don’t let the amount of money you save each month be determined by how much you spent. Rather, let your savings determine how much you are able to spend.

e) Make More Money (Seriously)

Sometimes the best solution when you can’t seem to save any money, is to make more money. Reasons You’re Broke And Can’t Save Money.

This is especially helpful if you need to pay off debt, but don’t have any room in your budget to pay extra.

If you want to make extra money, you basically have two options. You can either go get a second job, or start a side hustle of your own.

The first option might not seem very glamorous, but a second job can add upwards of $1,000 to your monthly income, which can help you pay off debt pretty darn quick.

Starting a side business is less of a sure thing, but in many situations it can turn into a thriving full-time gig. So, if you have something you are passionate about, and you can make money doing it, don’t put it off any longer.

Just be sure you don’t start a side business that costs you a bunch of money to get going. The whole purpose is to make more money so that you can finally save money.

Once your are in a better financial situation, you can entertain the idea of a business that requires some upfront costs.

Final Thoughts On Reasons You’re Broke And Can’t Save Money

There are all sorts of things that can keep you from saving money.

But, if you take the time to identify why you can’t save money, and figure out how to conquer those obstacles, you will be well on your way to a better financial situation.

I hope this article will help you do just that!