There are billions of people who are bad at saving money. The great news is that saving is within your control. The best thing you can do is to automate your savings so that the temptation to spend frivolously is gone. Hands free personal finance is the best.
American savings rate reached an abysmally low rate of 2.3% as of October 2022 from a high of 33.8% in April 2020. Consumers and people are very strapped for cash because of a low savings rate. Savings are what keeps consumers and Americans afloat during the bad times.
Emergency funds are more important now than ever before. The high inflationary environment of 2022 and 2023 is a once in a lifetime event that tightened Americans’ budgets, including mine. Every time I paid for gas or food, I felt pain. It physically hurt me to pay for those goods.
It didn’t help knowing that layoffs were on the rise at the latter half of 2022. It’s one thing to lose money on investments. It’s another to lose a job on top of it all. A job gives you cash flow to pay for your life and build your net worth with.
If you are bad at saving money, the great thing is that it’s a behavioral personal finance concept. It’s a learned concept that anyone can employ to make themselves richer and better with money. This is how I learned. By learning from others on how to save money to better my own finances.
The information is readily available out there.
Bad at Saving Money? Do These 9 Things
There are 9 steps you can implement today if you are bad at saving money to combat the negative effects of a spending behavior.
1) Automate Your Savings
Once your paycheck hits, it should automatically go to either a 401k or savings account. Automating savings allows you to have hands free personal finance. It removes the chances of human error as you go through the journey to become a millionaire.
Every paycheck, a portion of my money goes to my 401k, HSA, and Roth IRA. These 3 tax-advantaged accounts are the only things I need to be a millionaire. However, I’m not stopping there. I’m investing more in my brokerage accounts as well.
Once you let automation handle your money and finances, that’s one less things you have to worry about. That frees you up to pursue more profitable projects as time passes. It’s liberating to save money and to know that you’ll always have that cushion in case of a job loss.
Automating savings prevents you from being bad at saving money.
2) Bad at Saving Money? Create a Budget
A budget is the antidote to bad savings habits. I’ve strictly adhered to a budget for the first 3 – 5 years out of college and now, I’m reaping the rewards from saving that money. It’s become second nature to me on how much I can spend in a given weekend or month.
Then I stick to that budget, without fail. If you’re bad at saving money, a budget is the antidote to that problem. The most important essential expenses in that budget is housing, food, and transportation. Once you budget for those items, keep your expenses as low as possible as well.
For me, personally, I try to spend on a $2k/mo to $2.5k/mo budget. Nothing more and nothing less. There’s not a lot of things I need to live my life. I suspect I keep my budget even lower than that because I live with a roommate.
If you’re bad at saving money, a budget is the perfect solution to combat that problem. Making sure to stick with the budget is key.
3) Disappear for a Month
Your friends tempt and influence you more than you know. When you disappear for a month and cut contact with the world, you’ll be surprised at how much you save. If you’re bad at saving money, cut yourself out from the outside and external world.
In 2022, I disappeared for a solid six months. No contact with friends, except for family. That felt amazing to me. It was a peaceful time where I could finally focus on the projects I was passionate about without the distractions of the outside world.
I saved more money than I ever thought I could save because I no longer had to go out to expensive restaurants or to outings that I had no interest in attending. Your friends will influence you to share in their interests as well as yours. If you’re bad at saving money, it’s time to remove bad influences.
That doesn’t mean break it off with your friends but it does mean to experiment and see where you can cut back on spending money. It’s more than you know.
4) Use Fear to Your Advantage
After I graduated college, I was desperately afraid of being poor. I was afraid that all the work that I put in will be for nothing if I didn’t get my money right. I used that fear to my advantage to save and invest as much money as I possibly could.
My thinking was if I don’t have money, I don’t eat. Forget self actualization at this point. It’s that I don’t have money to put food on the table. If you’re bad at saving money, be afraid of bad circumstances and the worst case scenario. There are many billionaires who lost everything by the end.
The Great Financial Crisis of 2007-2009 wiped many people clean, even the ultra rich billionaires. If it can happen to them, it can happen to you. It’s better to sleep soundly at night than it is to maximize gains as much as you can with leverage.
Fear is a great motivator to achieve great things with your life.
5) Read Personal Finance Blogs
The more people read personal finance blogs, the better their finances are. The ones who are bad at saving money haven’t put in effort to better their money situation or even learn more about it. Personal finance blogs fascinatingly give away this information… for free!!
What!! I was shocked that there are people out there who give away this information for free. And not only is the information free, the information is accurate. I personally deployed what I learned from others into my own life and I can confidently confirm, they work.
Things like investing, negotiation, increasing income, and the like. Personal finance blogs saved my life and money from eroding to useless and nonsensical things. Financial literacy is sadly at the lows in America. The government has a vested interest in not teaching you this information.
It’s time to break free from the matrix and live a life on your own terms. Make your life your own.
6) Bad at Saving Money? Don’t go to the Grocery Store Hungry
There’s studies that show you spend more money when you go to the grocery store hungry. No matter how great you are at resisting temptation, you will not resist the temptation of food with a growling stomach. The smell of a freshly baked bread tugging at your nostrils is a powerful temptation.
Even if you don’t smell the food, just the thought of food is a bad temptation to break. I always buy more Doritos chips or chocolates if I go to the grocery store hungry. Sure, I eat the food by expiration, but it’s food I wouldn’t have bought otherwise.
If you’re bad at saving money, it may be because you go to the grocery store hungry. There’s plenty of other restaurants or meals you can cook yourself instead of buying unnecessary food at the grocery store. Your wallet will thank you.
Grocery stores are notorious at manipulating human psychology to get us to spend more money. We have to win at the psychological warfare.
7) Have a No Spend Week
The best challenge to implement is to have a no spend month. However, if you’re bad at saving money, it’s not a bad idea to dip your toes into not spending money for a week before going even further than that. This doesn’t mean don’t spend any money on things like food or gas.
But it does mean don’t spend any money on unnecessary things that you don’t use or need. We buy so much unnecessary things in our lives without even realizing it. Why? Spending money makes us feel good. It makes us feel dopamine that we’re moving up in the world.
However, just cause it makes us feel good does not mean that we should go through with it. Our senses betray us in more ways than one. Dopamine is a chemical that ruined so many lives. I personally try not to spend on most weeks of the year.
I personally only spend money in about 20 of the 52 weeks out of the year. It’s served me well and I really love it. If you’re bad at saving money, it’s time to have a no spend week or challenge.
8) Actually Write Down Your Money Goals
It’s one thing to say and think that you’re going to save money. It’s completely another to write it down. It makes you feel accountable to your goals. It’s not an abstract thing that lets you say, “oh yeah, I’m making progress, I think”. It’s a concrete thing that lets you measure your success over time.
Every year, you should write down your money goals and see what your savings goal is. As long as you didn’t lose your job through a layoff of the kind, then you should meet those goals, handily. Your savings are completely within your control.
If you’re bad at saving money, store your goals so that you can be held accountable. No one is going to punish you but yourself. It’s your life, anyway. Every year is an opportunity for you to crush your goals and soar to new heights.
You have the ability to reach and soar to new heights no one ever thought was imaginable as long as you put in the work.
9) Bad at Saving Money? Take Action
Actually do the things you want to do. Don’t just write it down and don’t just say it. Actually go out and take action to achieve your goals. Too many people want and think they’re going to achieve their goals. Until the time actually comes and they fail.
If you’re bad at saving money, it’s time to take action and execute on your goals and wants. It’s one thing to say you’re going to save money and it’s another to actually go out and do it. Action separates the great people from the mediocre ones.
Sticking to your budget, avoiding eating out, making more money, and saving more money is something that’s completely within your control. If you fail at it, you have no one to blame but yourself. It feels great when you know your successes and failures are completely your own doing.
No one else’s but yourself. Once you actually succeed in your money goals, you feel the sense of accomplishment.
Bad at Saving Money? You Can be a Great Saver
Millions of people are bad at saving money. The great news is that anyone can be a great saver because it’s a behavior that is taught and learned. No one is born to know how to be a great saver. Everyone eventually learns from others.
The bear market of 2022 taught everyone that saving money is the cornerstone of great personal finance. There were layoff news from Google, Microsoft, Twitter, Netflix, and Facebook left and right with seemingly no end in sight. Tech giants who felt invincible in 2021.
Many of my friends were bad at saving money until they met me and I taught them straight on what to do with their money. Money is such an integral part of our lives that we can’t afford to be bad at it. It’s what puts food on the table and a roof over our head.
Once you figure out the game of money, everything falls into place and everything makes sense. I’m not currently there yet but I’m making significant progress to get there. Once I get there, it’s going to feel that much sweeter than if I hadn’t put in the effort.
The cost of living skyrocketed for us and wages haven’t been keeping up. Therefore, it’s significantly harder for Americans to save money because that’s how the game is designed. However, just because it’s harder doesn’t make it impossible.
We all make our own choices in life. There’s always a way to better our finances and become richer by the end.
Bad at Saving Money? 9 Things to do Shortlist
- Automate your money
- Bad at saving money? Create a budget
- Disappear for a month
- Use fear to your advantage
- Read personal finance blogs
- Bad at saving money? Don’t go to the grocery store hungry
- Have a no spend week
- Actually write down your money goals
- Bad at saving money? Take action
