Why is it hard to save money in America? The biggest reason is that the country has a big culture around spending money. Society bullies you and makes fun of you if you don’t spend your money freely. The peer pressure effect is real and can’t be avoided easily.
When I first started my full time job in 2016, I told everyone that I was saving 50% of my money in a 401k. Everyone then talked about me behind my back. Then one day, I could finally see what they thought and were talking about me. One day, people publicly ridiculed me for saving so much.
It was shocking. They were making fun of me for saving and investing my money so that I could be an eventual millionaire by my 30’s. They wanted me to spend as much money as possible because otherwise, I was just a cheap person who sacrifices life over money.
Nothing could be further from the truth, but that was OK with me. That’s when I realized that America just has a spending culture that can’t be broken. All of the marketing say that the American dream is to spend as much money as possible and live it up!
Why is it hard to save money in America? It’s hard to escape the excessive consumerism mindset if you are living in a culture where that is valued. No matter how much we like to say “we don’t care what others think”, others influence our decisions and thoughts more than we know.
Why is it Hard to Save Money in America?
The first reason why it’s hard to save money in America is because you’re not SMASHING that social share button and posting to your favorite social media! Other people would benefit from knowing how to save.
So with that said, let’s go over the reasons why it’s hard to save money! Many of these reasons are avoidable.
1) Wages Haven’t Kept Up
Whether we like it or not, wages haven’t kept up with the value we provide to our employers. It’s projected to continuously get worse as time passes. Even if employees continuously do “quiet quitting“, it’s not going to be enough to compensate us for our time and past efforts.
We’re living in a “what have you done for me lately?” society that if employers don’t see good effort in their workers in recent times, they will get rid of them. Companies could start to get disappointed when the majority of workers are fed up and will choose to quit quietly instead of making their jobs their life.
Why is it hard to save money in America? Employers do not pay salaries based on the value employees provide to the company. Employers pay salaries based on what employees are willing to accept. They will do everything and anything possible in order to depress wages.
And pay people less than they deserve.
There’s a reason why tech companies had to pay 9 figures worth of money as settlement for employment antitrust violations. Companies are bad entities.
2) Marketing is All Around Us
It is insane just how much collecting data is allowed, both online and offline. FaceBook faced the Cambridge Analytica scandal. They most likely paid a fraction of the money they earned from that scandal.
Devices such as Amazon Echo, Google Home Dot, and more are coming that collects our data..
As companies collect more data about us and what we like, they can sell much better products to us. Why is it hard to save money in America? Companies know more about us than we know about ourselves. Netflix’s “recommended shows” are genius at knowing what we like.
Sometimes, we watch a completely new show we didn’t even know existed because their recommendations are so spot on. Americans can’t escape these types of marketing and therefore makes it almost impossible not to spend money.
The laws in the country are quite liberal if it helps drive the economy forward and upwards. Even at the expense of privacy.
3) America has a Spending Culture
We have a hard time controlling our own impulses by ourselves. Imagine how much harder it is to control our impulses if others are encouraging your behavior. It’s almost impossible to control, at that point. When you see your neighbor get a brand new $30k car, you can’t help but think you need that too.
It’s a culture that you can’t escape. It’s deeply ingrained in our psyche because whether we like it or not, we unconsciously want to commit the 7 money sins because we’re humans, first and foremost. Why is it hard to save money in America? Our culture encourages it.
And when you’re the odd one out, it gives society a “reason” to make fun of you. Opulence, abundance, and hedonistic lifestyle are things that Americans value very highly. Even the poor ones do. Even if the goal is to be rich and not to look rich, people can’t help but try to look rich.
It’s beneficial to recognize when an entire culture is putting you in a worse position than before. So you can break free from that mindset.
4) It’s Hard to Save Money in America because the Media Glorifies Spending
The media loves to highlight the spending habits of billionaires and millionaires because it’s what gets them clicks. So when we see those millionaires and billionaires purchasing mansions and Lamborghini’s, we think that’s normal behavior. We think that that’s the “good life”.
What the media fails to highlight is that those rich millionaires and billionaires are getting divorced. Or that their children secretly try to get away from them. Or any number of a different personal life problems that they conveniently leave out.
Why is it hard to save money in America? The media just makes everything 10 times worse. They make everyone think everyone should have a Lamborghini or a 5,000 sq. ft. mansion from which to enjoy life from. Quality of life doesn’t stem from material things.
Quality of life stems from how you’re feeling at a point in time.
5) Financial Literacy is Poor in America
Credit cards are one example. Many people use credit cards not to purchase things they were going to purchase anyway. But many people literally use those credit cards as emergency funds. If your emergency fund is a credit card, you don’t have an emergency fund.
Why is it hard to save money in America? Schools do not teach good financial literacy classes. We are forced to figure it out ourselves. People are so uncomfortable talking about money that they would rather have us figure it out than teach us.
Even in the richest and wealthiest country in the entire world, financial literacy is very poor. Even with many personal finance creators all talking about financial literacy, it’s still very poor among the masses. Education is expensive but ignore is more expensive.
Especially when it comes to personal finance, building wealth, and money. The topics are too important to ignore.
6) Unhealthy Pride
People want to show off. Some people have a dying need to make others feel and think that they are leading great lives. That’s not true. The goal is to be rich not to look rich. There’s no point in having a million dollar mansion if you have no money in the bank.
Why is it hard to save money in America? People’s unhealthy pride and ego gets in the way of them building wealth. Some people live to impress others who don’t even like them back. They spend money to upkeep their beautiful life image that they don’t even have in reality.
A healthy ego and pride is necessary in order to build wealth. However, too much ego and pride are people’s downfall. It’s what causes them to spend more than what is necessary. Once you have no need to show off your life to everyone on social media is when your world becomes free.
There’s no use for unhealthy pride when it comes to getting richer.
7) Debt
Credit card debt balances are at the highest levels we’ve ever seen in our life. With a personal savings rate of 5.1%, it’s no wonder that Americans need debt in order to fund their lifestyle. Not to start companies and businesses, but to just stay alive and fund their life.
Why is it hard to save money in America? People depend on debt in order to go through their day to day activities. There’s no reason why anyone should have debt greater than 10% interest rate. It’s even hard to get that in stock market returns, let alone paying it out in debt interest.
When you use debt to acquire more money than the cost of debt, then it’s fine. However, many people downright do not know how to do so. They don’t use debt to fuel their wealth. They use debt to just pay for their life. That’s not a good combo to get there.
Debt will always be the enemy of the person who doesn’t know how to use it properly.
8) Americans Don’t Practice Delayed Gratification
Many people absolutely cannot practice delayed gratification. Even though it’s been proven that patience is the greatest behavioral characteristic that separates the successful from the unsuccessful. Not smarts. Not natural talent. Patience and the ability to wait for good things to happen.
Why is it so hard to save money in America? We are generally bad at waiting for things. Companies conditioned us that having and doing things now is the best way to live. Amazon even implemented a 1-day shipping program where customers don’t even have to wait days for their packages.
It literally comes in the day after. Americans are willing to pay exorbitant amounts to access that convenience, as well. Convenience is very expensive in terms of money and Americans are more than willing to pay for it. Even if it costs them more money than what convenience is worth.
Waiting for things will be the greatest competitive advantage that people can have yet they refuse to practice it.
Why is it Hard to Save Money in America? Don’t Let it be You
There are many reasons why it’s so hard to save money in America. However that doesn’t mean that you shouldn’t save money. It means you should try your hardest in order to beat everyone else and save and invest as much money as you possibly can.
There’s a reason why I amassed a small fortune of $400,000 by my mid 20’s. There’s a reason why I’ll be an eventual millionaire by my 30’s. It’s not because I spent as much money as I possibly could. It’s because I saved and invested my money even though it was easier to spend.
I can’t imagine not having a lot of money at this stage of my life. There’s been times when a vast majority of my paycheck went to living expenses. And it made me feel so bad. That I was giving all my power away and that my employer controlled my actions.
Because if I didn’t do what they wanted, they can fire me. As a result, I can’t put food on the table. Why is it hard to save money in America? Wages haven’t kept up with the rising cost of living and inflationary pressures. It’s understandable. However, that doesn’t mean you can’t build wealth.
Investing $500/month will change your life for the better. People think investing that much doesn’t make a difference once it actually makes a difference. It’s not going to matter in the 10th year but in the 20th year is when people are going to ask how you got there in the first place.
It’s amazing what can happen once you ignore pride and do prudent things.
Why is it Hard to Save Money in America? Shortlist
- Wages haven’t kept up
- Marketing is all around us
- America has a spending culture
- It’s hard to save money in America because the media glorifies spending
- Financial literacy is poor in America
- Unhealthy pride
- Debt
- Americans don’t practice delayed gratification
