If you are bad at saving money, you are not alone. High inflation made it infinitely harder for many Americans to save money. The first step to becoming a better saver is to figure out the reasons why you are bad at it. Without knowing the reasons, you cannot improve.
2022 showed just how bad people were at saving money. The car loan market demonstrates just how bad people are willing to spend above their means in order to fund their lifestyle. When COVID first started, car sales plummeted and therefore, prices.
However, as time passed, people started spending their stimulus checks on buying cars.
Also, coupled with the supply chain issues, chip shortage, and increase in demand, car prices skyrocketed. People ignored those increase in car prices and kept buying to their heart’s desires. A dealership’s best month is around April/May. Which is when the consumers’ tax refunds hit their wallets.
This is why people are bad at saving money. Once they get any sort of a windfall or money fall in their lap, they think about how to spend the money. Instead of saving and investing for their future. This is why giving money to the financially illiterate is very dangerous.
Even if someone gives them a million dollars, they’ll figure out how to spend that money instead of figuring out how to best grow it. But that won’t be you! You are trying to figure out why you’re bad at saving money so you can take steps in order to improve your financial life.
It can be done.
Why You are Bad at Saving Money
The first reason why you are bad at saving money is because you don’t SMASH that social share button and post to your favorite social media! Sharing and talking about money is a good way to attract like minded people in order to level up with your finances.
So with that said, let’s go over the real reasons why you are bad at saving money!
1) You Live “In the Moment”
The United States has a highly consumeristic culture. Whatever we make, we have to spend. Society generally mocks savers for saving money. They think, “what are you even saving for?”. “What’s the point of saving? We’re all going to end up in the grave anyway”.
I’ve personally heard many variations of these statements many times in life. And that’s a very dangerous mindset and mentality to have. If you’re bad at saving money, it’s because you live in the moment instead of practicing delayed gratification and protecting your future.
Your retirement life may be something like 40 years away, but 40 years comes sooner than you think or give it credit for. The ones who get ahead are the ones who have the vision to save money in order to protect their future and their future family life. It will come.
2) Bad at Saving Money Because You Don’t Have a Budget
Budgets are financial life savers, especially knowing what your bare bones budget is. There are certain numbers that you have to know in order to make a financial decision. Whether we like or not, adults make 35,000 decisions per day.
By knowing your key money numbers like the back of your hand, you’re eliminating the chances of error.
Not having a budget means you’re bad at saving money. For me, personally, I spend approximately $1,800 – $2,000 per month, including rent. I wish that number was lower but inflation has made life much more expensive these days than the years before.
I know my numbers so that when I’m at the grocery store, I know exactly what I need to spend money on before I even go into the grocery store. Sure, I deviate from it some days. However, many days, I don’t deviate and stick to my budget. There’s much more savings that I need to do.
3) You Use Debt to Buy
It’s flabbergasting. Americans actually take on debt in order to buy stuff. Instead of thinking like they can’t afford it, they think like how can they afford it? And they don’t look for the hardest option out there, they look for the easiest way to gain access to that money. So they turn to using debt to fund their life.
If you’re using debt to buy, you are bad at saving money because debt costs money. You’re not spending $500 in order to buy. You’re spending $550 to buy including interest. That’s already 10% more expensive! And if you default a secured loan? You paid more money for nothing.
Using debt in order to buy something is a HUGE no no unless it’s an asset that’s going to make you more money like a home or a car. Financing that laptop purchase by taking on 6% debt isn’t the best idea. Debt bankrupted many people. Don’t let yourself be one of those people.
4) You Have a Spender’s Mentality
This is the hardest mentality to break because society teaches you that spending money is the way to go. That’s not right. Many people have the “What’s the point of saving money if you’re not going to use it?” Or they have the, “well, others are spending money so it’s fine if I am as well”.
It’s more important than ever to have a saver’s mentality in order to protect yourself from disaster. Many people became homeless as a result of the 2007-2009 financial crisis. It won’t happen to you until it does. No one is safe. Even some of the richest people in the world declared bankruptcy.
Saving money provides protection. It’s a level of insurance that you have for your life without actually paying for insurance. It’s free to save money. 2022 opened my eyes on how quickly things can change. Good times can change to bad times in the blink of an eye.
It isn’t easy to get back to the financial situation you were at before. Being bad at saving money has detrimental consequences.
5) You Don’t Increase Your Income
Some people are bad at saving money not because they don’t have the discipline or the fortitude to save money. Some people are bad at saving money because they don’t increase their income. It’s easier to save money on a $150,000 salary than it is to save money on a $50,000 salary.
We all have basic living expenses that we have to take care of before we spend money on luxury goods. Increasing your income is a surefire way in order to move up, save money, and take care of your financial future. Now’s a good time as any to increase income by starting a side hustle.
Sure, it may take more work than you would like. However, it can be done. Many people have done it. It’s time to start that side hustle or take up extra shifts at work. Or do a better job at work in order to move up and earn a promotion. Whichever way that you do it, it’s time to do it.
Don’t let opportunities just walk on by.
6) You Think Saving Means Being Cheap
This is what people don’t understand. Saving and investing as much money as you possibly can is not being “cheap”. It’s being smart and protecting your life from disaster later down the road. Society loves to shame savers because savers are doing something different than what society want the savers to do.
Or people are bad at saving money because they associate negative thoughts around saving money. That’s the wrong mentality and mindset to have. Saving money is building your empire and war chest for a rainy day down the road. Not having money gives you no options.
Having money gives you a lot of options that people don’t even know about. Saving money means that your future self and family is going to thank you. You’re going to reap all of the benefits of the effort that you put out today in about 5 – 10 years. That’s a beautiful thing.
Saving money is a wonderful thing.
7) You Think You Have Time
“I’ll get around to saving money because I’m young, I have time”. No. A dollar saved 5 years from now will be worth much less than a dollar saved today. There’s no time to waste. The dollar lost 92% of its purchasing power since 1952 and is dropping every year.
People are bad at saving money because they put it off till later.
They want to live for the now and they think they can start saving in 10 years and still catch up. By then, the people who’ve been diligently saving and investing their money will be mountain times ahead of people who didn’t. Time is a scarce resource. Every second that passes, you don’t get back any of it.
When I first started my job out of college, I didn’t waste any time because I started saving and investing as much money as I could, living in the slums. I paid $640 per month for my first apartment out of college. Although I lived in the slums, I am so thankful my younger self put in the dues.
I don’t regret any of it.
8) You Don’t Automate Savings
Too many people discount the benefits of automating savings. If every month, they just let technology do their thing and put a percentage of their paycheck into 401k, then everything would work out. That is hands-off approach. You are literally protecting yourself from yourself.
You can’t make bad decisions with the money you don’t have.
If you’re trying to be good at saving money, then it’s time to look into automating and transferring your paycheck to your checking and savings accounts every month. Every paycheck, a portion of my paycheck goes into tax advantaged accounts like the 401k.
I know that even if I spend any money leftover thereafter, I already did the right thing by investing my money first. It’s time to start putting your financial future first ahead of any other people who wants a slice of your money.
There are many people who solely sees you as a wallet of money they can extract value from.
9) You Don’t See the Point of Saving $10
You think, “it’s just $10, what’s the point? It’s not going to hurt me at all”. These people say those words 300 times per year. Then that becomes $3,000 they could have saved money to put to work in the stock market.
Someone investing $100/month on a $50,000 salary will ALWAYS be better off than another investing nothing.
Even if their income is something like $200,000. In 20 years, they will lag behind the other who diligently saved and invested their money like there’s no tomorrow. Saving $10 today is better than making $10 today because of one simple word: taxes.
If you’re bad at saving money, it’s because you’re trivializing just how important $10 can turn into throughout the course of your life. The people who get ahead don’t make the most money. They aren’t even the smartest out of the bunch.
They made good decisions with their money that allowed them to get there.
Bad At Saving Money? You Can Change
There’s always a way to change if you are bad at saving money. You’re not the first person to be bad at it nor will you be the last. What’s going to make the difference is your desire. Will you actually put in the work to change your mindset and therefore your actions?
Or will you just read about how to be a better saver and leave it at that? Knowledge without application is useless. You might as well never have gathered knowledge in the first place. Americans are feeling stressed about their finances at a record pace than ever before.
It first starts because they don’t employ the basic fundamentals of building wealth and getting ahead. It starts because they are bad at saving money. Saving money is the pinnacle first step that every person should take in. The second step is to invest their money but that is another topic.
Financial literacy is at an all time low. Even with many helpful YouTube videos, books, podcasts, and endless stream of messages telling Americans what the best use of their money is. It would be a shame if all of these efforts were in vain. Especially since we do it for free.
There’s nothing wrong with being bad at saving money, but there’s everything wrong with not wanting to change the direction of your future. I’ve been at a position where I don’t have any money before. It doesn’t feel good.
You don’t want to go through what I went through because I don’t want to feel it ever again.
9 Reasons You are Bad at Saving Money
- You live “in the moment”
- Bad at saving money because you don’t have a budget
- You use debt to buy
- You have a spender’s mentality
- You don’t increase your income
- You think saving means being cheap
- You think you have time
- You don’t automate savings
- You don’t see the point of saving $10
