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Why Can’t I Save Money? 15 Things You Do Wrong And Can’t Save Money

Why Can’t I Save Money?

Jenny looked at the pathetic piece of paper in front of her and silently asked herself “Why can’t I save money? I should be able to do it…” Her salary was not the highest possible, but it was OK, and many people would be more than happy getting paid as much as her.

She had a few debts, but nothing unmanageable. The mortgage was eating up a lot of money, but it was an investment and didn’t bother her as much as “the other amount”.

“The other amount” was the money she was supposed to be able to save every month. She couldn’t put aside even the smallest percentage of it. Why?

Do you feel like Jenny?

She knows something is wrong. The amount she managed to save is next to nothing compared to what the simple math was telling her.

Many people are in Jenny’s situation, and I was there too. There’s no doubt in the following: Whatever your salary, you can save some of it.

Let’s see why you can’t save any money then.

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1. You Were Never Taught How To Save Money

I don’t want to blame anyone, but the simple fact many of us fail in saving money is that we were never taught how to do it.

When I was a little child, I was told countless times that I should start managing my money after I start making it. Before that, my parents were the ones who told me how to spend it. On the other hand, at school we were taught countless other stuff I never got to use in my life, but not even once was I told how to make or spend money.

The educational system gives us a lot but misses a lot. And its effect chases us up until one day we decide to take control over ourselves and start learning on our own.

You were never taught how to save money either. And the process of saving isn’t just calculating your income and spendings. That’s only 10% of it.

2. Bad Money Habits

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While the income-spendings-calculation is 10% of your reason you can’t save money, bad money habits are almost 90% of it.

Cultivating good health habits so we could be healthy and happy is normal, right? So why no one wants to talk about cultivating good money habits?

Our habits build up to 95% of our life (if not even more). Do you go every morning to the local coffee shop for a latte? That’s a money habit. Do you enter the grocery shop and you buy the same food every week (with small exceptions… really small)? That’s money habit too. Everything that requires you to physically take money out of your pocket (or smoothly swipe that credit card) is a money habit.

Now, it’s your turn to find out if your habits are good or bad.

If you need inspiration or guidance, I have a list of 20 heavenly good money habits here (psst, free printable included).

3. You Don’t Track Your Expenses

There are two ways to track your expenses:

  • Using a piece of paper (like Jenny) and daily writing down what you spend your money on.
  • Using an App, your phone or any other device to enter your outgoings daily.

If you do something different than that – you don’t track your expenses.

Let me go over the line and answer to your “I don’t have so much time every day to do that sh**t.” (I hear this all the time). If you have a Facebook account, an Instagram account and play even 1 game on your phone, then you have time. You just don’t want to spend it tracking your expenses.

4. You Don’t Use Enough Cash

Cash is so retro. No one does it anymore. It’s so much easier to touch some machines with our cards, and in less than a second we’ve paid for whatever. It’s faster. It’s smarter.

Um… yeah, except it’s not.

At least not while you still learn how to save money.

There’s a reason many financial advisers ask their clients to pay cash for everything. Observing yourself how many times you reach into your wallet and physically give your money away is more powerful than you think.

You see, when we work with cash only, we see how much money we’ve got left in the wallet/purse. We know we have 5 notes of £20 and we just spend 4 of them on something. We see how much we’ve got left and that sticks in our mind. When we enter the next shop we know, we have only £20 left.

On the other hand, when we pay with the card, we see how much we’ve got left after we go home and only if we check our online banking. So, if we spend £80 in the first shop and we like something in the second shop, there’s a big chance we’ll get it. It’s going to be with the credit card, or we’ll enter our arranged/unarranged overdraft. But it will happen.

5. You Never Set Up a Budget When Shopping

I am ruthless when setting up a shopping budget. If something is £2 over the budget, I’m not getting it. I hate it at the moment, but I stick with it, and I’m proud of myself later.

Unless you shop in the pharmacy, no other shop gives you the excuse to overspend. I’m sorry, but that’s the truth.

There’s only one way you can always fit in your budget, 100% of the time. It’s a secret no one wants to tell you. I will.

Make your shopping list, calculate how much you’d pay at the end and withdraw the cash from your account. Leave your cards at home. If you have only £50 in your pocket and have to choose between meat and yet-another-chocolate-cake, the meat is going to win.

6. You Think That You “Need” Something You “Want”

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I worked in a bank for 10 years. I cannot even tell you how many times I’ve heard people telling me they have no idea what they bought with the money from their credit cards or loans.

That’s because they use the money to buy things they wanted and not the things they needed. A house is something you need, and you are very aware of the money you spent on it. A car is something you need to get to work (although often we overspend on a car we want instead of focusing on getting the one we need – which is almost any car). An oven is something you need. 65′ TV is something you want.

When things add up, you get a better understanding of how you spend your money.

7. You Don’t Zero Down Your Account

I talk more about this method of paying off debts and saving money in the 20 smart money habits post here.

In a nutshell, the day before you get paid you have to transfer every little coin that’s left in your account in the saving account or to cover a debt. Even if it’s £5, you have to do it. In this way, you zero down your account and start the next month with brand new money to work with. The moment the month is gone your money should be allocated somewhere else to do some other job.

This simple technique paid off many of my debts in the past. I know it works. I guarantee you it works.

8. You Don’t Have a Good Reason To Save

Many people believe they have a good reason to save money and then they realise they can’t save anything. The truth is, not every reason is going to motivate you to save money. Paying off your debts sounds great, but it also sounds dreadful, painful and it “takes forever”. Lack of motivation kills your mood two days after you “start saving money”.

What to do then?

When I met my fiancée, he was smoking. I am not a smoker, and I can’t stand the smell of cigarettes for many reasons. I didn’t ask him to stop smoking, but I wouldn’t kiss him for at least 10 minutes after he had had a fag.

After a month into the relationship, he decided to give up on that habit. He knew it was something he wanted to do. But he lacked enough motivation. On the 1st of January 2017, he stopped smoking. He had motivation. He bought himself the car he always wanted to. The money he was paying for cigarettes we redirected into a monthly payment for a car he loved. Even today, when we sit in the car, we both remember why he has it. He didn’t smoke even once since.

A good reason will keep you doing the right things. Find yours.

9. You Don’t Really Have a Plan on How to Save Money

“I’ll save as much as I can” is not a plan. That’s the plan Jenny (from our story above) had.

A good saving plan requires you to work with numbers and stick with these numbers. A good saving plan works only if you create it.

Cutting off on spendings, relocating money, planning ahead, weekly and monthly transfers (direct debit or you manually) – these are part of a good saving plan.

10. You Still Buy Your Lunches and Coffees

woman-going-out-from-a-coffee-shop

I’ve said it for a few times, and I will keep saying it – we spend a lot of money on one-time-things we want.

We need to eat at work and coffee is an essential part of us not killing anyone in the office. But we want to go to XYZ fast-food place or a fancy restaurant to have lunch. And we want to pay £3-£5 on coffee once or twice a day.

Homemade food is cheaper, but even more importantly – it’s better quality. Make your first coffee at home and have it on your way to work. Drink the coffee at work or if it’s that bad, bring your own instant coffee and keep it in your desk. Do you hate instant coffee? How bad do you want to save money?

11. You Don’t Stick to Your Decision to Save

You might have noticed so far that I keep saying “you don’t” and “you don’t want to”.

I do that to point out the elephant in the room – saving money is a personal decision that requires only that – to decide to do it. And to stick with it, of course.

No matter how much I wanted to save money in the past so I could pay off the 5 credit cards I had, nothing changed until I decided to stick with the process of saving money. Do you stick with your decisions?

12. You Don’t Plan Ahead

You can’t save money for the future if you don’t plan your spendings for the future ( if that makes sense).

Planning ahead is as important as tracking your outgoings today.

Write down every birthday you need to buy gifts for. Plan how much you would spend on school supplies. Include the amount you’d ideally spend on your next holiday, on Christmas gifts, on Black Friday sales (I know you won’t miss them)… Plan. Ahead. Everything.

13. Takeaways and Eating Out

You eat them; they eat your savings.

As simple as that.

Last week I was calculating how much we used to spend on pizzas in our house. We would usually order once a month a Buy One, Get One Free deal and it would cost us £20.  It turned out we would spend £240 a year on pizzas only. That’s more than our monthly grocery shopping. We would spend a full month of groceries on 12 nights a year.

When I told my partner about this, he said: “Well, yeah, but we live once, and we need to have fun too.” I said: “Going out to eat pizza with friends is fun. Staying home with friends to have pizza is fun. Ordering pizza because I don’t feel like cooking tonight isn’t fun. It’s called laziness.”

Prioritize and call things with their real names.

14. You Have Too Many Debts To Pay Off

wooden-man-holding-debt

Sometimes you just have too many debts. And that’s it.

Unless you work on them, you won’t be able to save anything soon. If you want to know the three main methods of paying off debts, check out this useful post here.

15. You Overspend On Bad Habits

I already mentioned this, but bad and unhealthy habits ruin your health and keep you poor.

Smoking. Too much drinking. Gambling. If you are guilty on some of these – this could be your answer to “Why can’t I save?”.

It’s not my job to tell you what to do. I point the possible right direction, but you decide where to go.

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