why you aren't saving money

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Got money on the mind? Or rather- a lack of money? 

If you want to achieve your money goals, learning how to save money is essential. 

If saving money feels like a foreign concept right now, I get it- I had to work on becoming a saver. 

Spending money felt easy. I saw something I liked, I bought it, and I worried about my account balance later. 

Now that I’ve been consistently saving money for 3 years, I can assure you that saving money can feel just as easy. 

Let’s dive into the biggest reasons people struggle to save their money, and what you can do to easily save more money this month. 

Mindless spending

If you don’t have a budget, you will struggle to save money. 

Without a good idea of exactly how much money is leftover after the bills are paid and the groceries have been picked up, you won’t know how much you can save. 

Enter mindless spending- you’re spending money without a plan, so any money that could be saved quickly disappears. 

You need to become friends with your money- get to know it really well. On a typical month, do you have $300 that can be saved? $500? $1000? 

Whatever this number is for you, get to know it. That way you’ll know how much you have available to save- and you won’t spend it all without even realizing it. 

If you knew you had $500 this month that you could afford to save, it will make you think twice about spending that money on anything else. 

$500 saved every month equals $6,000 a year! 

How to fix it: You need to have a budget- it can be a monthly budget, but it can also be a bi-weekly budget if you prefer to budget for every paycheck. 

Grab this monthly budget template or this budget by paycheck template to get started!

You’re over relying on credit cards

Credit cards are trouble for those of us who are trying to save our money. 

There are two reasons for this:

  1. When you’re swiping a card, it’s harder to notice just how much you’re spending. You may even spend more (without noticing it) on every transaction when you’re using a credit card.
  2. Not only does all of this spending add up fast, but if you’re not paying your balance in full every month, then you’re also being charged interest on these purchases. That interest is money that could have been saved. 

Since they are convenient and can offer free perks (like points or cash back), it’s no wonder people rely on credit cards for a lot of their spending. 

You need to change your spending mindset. 

Instead of instantly thinking, ‘I’ll put this on my card’, tell yourself ‘I do want to buy this- but I’m going to save up for it first, then buy it’. 

You will only put in the effort to save for it if you really, truly want it- and you won’t be putting yourself in debt to get it (yay)! 

How to fix it: Start a spending wish list- it will be a place where you write down all of your dream purchases, how much they cost, and you can check off when you’ve saved enough money to buy them! It’s a fun way to both change your mindset AND feel good about treating yourself. 

You don’t know what you’re saving for

This was my BIGGEST realization when I started saving money for the first time. Of course I wasn’t able to save it before- I had no idea what I was even saving for! 

Why would you feel motivated to save your money, when you’re just stuffing it in a savings account…for what exactly? 

Now imagine that you know exactly what you need to save for- trust me, this makes all the difference!

There are three types of savings you need to have:

  1. An emergency fund (more on that here!) for unexpected expenses, like losing your job
  2. Sinking funds for each of your expected, planned purchases (like a car, a down payment on a house, or a vacation)
  3. Retirement savings

You should have money saved for unexpected events in life, so that you’re not worrying about your car breaking down or being laid off from your job. 

You should be saving up strategically for the expected things that you want, whether that’s buying your first house or getting your first car. 

And of course, if you plan to retire someday, you should be putting money aside for retirement (it’s NEVER too early to start- in fact, the earlier the better). 

How to fix it: You need a plan for your savings! Here’s an easy plan that covers everything:

  1. Save 3-6 months worth of living expenses in an emergency fund
  2. Make a list of the future purchases you plan to make (whether its new furniture or a vacation) and save for each one (these will be your sinking funds)
  3. Start a retirement savings account, like an RRSP

You eat out all of the time

Eating out is insanely expensive when you think of how much it would cost to make that meal at home instead. 

When you’re paying a restaurant to make your food for you, you’re paying for the food itself, delivery fees, taxes, and a tip. 

If you want to make a change that will save you lots of money quickly, starting to cook at home is the answer.

I saved over $500 a month by making my coffee at home, packing my lunches, and cooking at home 5-6 nights a week. 

How to fix it: How many times did you eat out in the last week? Check your bank statement to find out. 

Now, put together a fool-proof plan for the next 7 days. 

Plan the meals you can cook for each day, but allow yourself a day or two to eat out. It’s better to be honest with yourself- it’s a tough habit to break completely! 

If you’re wondering where to start, $5 Meal Plan is a convenient, affordable way to become a home-cooking pro! It’s only $5 a month for 30 days worth of delicious recipes- that only cost about $2 a person for every meal. And they come up with all of the meal ideas for you! 

Check out $5 Meal Plan here!

You need to break old spending habits

When you’re used to shopping regularly, it’s hard to change your ways. 

The term retail therapy was coined for a reason- if you’re having a bad day, a shopping trip is a welcomed getaway. 

Have you ever taken an intentional break from spending money? 

If not, you might want to consider a no-spend challenge. This is where you challenge yourself to not spend any money for a certain number of days. 

Of course, you can still have exceptions- for example, spending money on food would (obviously) still be okay. 

You can challenge yourself to not spend any money for 30 days, but if this feels too long, you can benefit from a 7 day challenge, too. 

Just make sure that during this time, you focus on finding new (and free!) ways to enjoy yourself. Try going for a walk, watching a movie at home, or baking something decadent for yourself. 

At the end, you will have new habits to replace spending money- and you’ll probably save money, too!

How to fix it: Try a no-spend challenge for 7, 14, or 30 days. During this time, only spend money on the necessities (like food), and take up new hobbies to replace shopping. At the end of your challenge, you’ll have new habits and a boost to your savings. Repeat as often as you want!

When spending money feels easier than saving it, it’s hard to change your habits. 

The good news is that there’s a lot of small changes you can make today- and they all add up! 

What tricks have you used in the past to start saving money? Share your ideas in the comments below! 

Happy Saving!

Emily