You want to save money, whether it’s for a vacation, a home, or to have a safety net.
You also need to save money for the daily cost of living and to pay off your debt.
Yet time after time you fail at saving up your money. You get started at it, then something comes along to wipe it out. You start over again, only to have another instance that needs that money.
Here’s 10 reasons why you suck at saving money…
What will I learn?
1. You Have Too Many Activities
You’re heading out with friends on Friday and Saturday nights. This adds up to about $65 or more a night. or about $520 a month, or $6240 a year.
You’re going to too many events like music concerts, sporting events, road trips and conventions. Again this eats into our wallet.
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You need to be more selective about where and when you go. Cut back clubbing to once or twice a month and only on one night.
Be choosier about what concert or event to go to, are you really that crazy about that band? Can you just watch the game on TV instead?
2. You Have Too Many Extras
You have too many extra amenities. You have premium packages on your televisions; have several subscriptions; have premium gym membership fees; eat out too much; drink specialty coffee and the like.
Do you really need 300+ channels on your TV? Can we get by with just 100? How about settling for Netflix, Amazon Video, or Hulu membership instead?
Think about cutting back on those subscriptions; what you really get out of that gym membership and can you go to a cheaper or free gym elsewhere? Eat out less and buy less coffee to go.
Look up online how to make copycat coffees and slow cooker meals and you’ll save a lot of money in the long run.
3. You Want It
You’re spending money on the newest model car, newest upgraded phone, a bigger TV and other things that you think you need.
This can be a very expensive and excessive habit. Did you know that as soon as you drive that brand new car off the lot, it’s lost about 9% of its value?
Just stick with replacing things as they break, not to upgrade to the next best thing because it’s there and you’ll look good.
A little modesty can go a long way. People will respect your modesty and honesty more than what bling you have. If you don’t think this is true, then you have deeper problems or the wrong kind of friends.
4. You’ll Start Later
When you’re young you don’t think about saving money at all. But you’re missing out on great savings in the future.
Think about this, saving $100 a month for 25 years at 3% interest you will end up with $44,712.28. If you start late and saved $100 a month for only 15 years, you’ll have $22,754.01 instead.
The secret here is the compound interest. Shop around at different banks and find a savings account that has a high interest rate and start there.
5. You’re Not Prepared
You don’t prepare for emergencies. You don’t set money aside for broken appliances, medical bills, job loss, and the like.
Not saving money for these things can drive us into more debt and poor credit.
A simple emergency fund should have at least $1000 plus the equivalent of 3 months pay kept in it.
If you have to, open a separate savings account not attached to your regular checking account so you won’t be tempted to dip into it.
6. You Have Too Much Credit
You easily fall into the trap of getting too many Credit Cards. You have several Credit cards, Fuel cards, Department Store cards, and Specialty shop cards.
The majority of the time the interest on these cards are high at around 13 – 15%. If you fall behind on these, it affects your credit standing and ability to make future purchases like a car or home.
Stick with a single debit card and cash only. This way you can get into the mentality of “if I don’t have the money in the bank, or my wallet, I can’t buy it”. This also lessens impulse buying and leads to less spending.
7. You’re Paying Debt Wrong
The first and foremost things that should be paid for are living quarters, electric, heating, and groceries; next are items you need for your job like clothes, transportation and phone; these are necessities to living.
Next to be paid are your credit debts. You should be paying the smallest amount owed first with the most available money and get that paid off quickly.
After paying that first debt off and instead of pocketing the money “I have extra money to spend now!”, take that amount and apply it to the next smallest debt owed, and keep repeating the cycle until all your credit cards are paid off.
When a credit card is paid off, close the account, you do not need to fall back into debt with it again.
Everything else are “wants”. Pare back on the wants, you don’t need them to survive.
8. You Don’t “Pay Yourself First”
You may think you don’t make enough money to be able to save. You’re living Paycheck-to-Paycheck.
Adopt the mentality of “Pay Yourself First” and with every paycheck you receive, put a little bit aside in savings before any bills are paid.
A simple $20 a week into savings can end up being about $1071 a year (3% interest) which can be $5356 in 5 years. It may look small, but it’s a start.
9. You Think Cost of Living Is Too High
Sure you can’t help how much things cost, but you do have the choice of how much and where you will spend on these items.
You can choose to live in a smaller place, or in a more modest part of town, or even in a different city with lower living expenses.
You can drive a smaller, more efficient car or take public transit.
You can shop around for lower insurance rates, utilities, and grocery stores.
You can find good quality clothing at consignment shops or use online rebate websites for online shopping.
10. You’re not Budgeting
You don’t even know how much money is going where? It comes in and it goes out and you wonder why you don’t have any money left.
Having a simple budget and sticking to it is the surefire way of saving up money, paying off debt and cutting expenses.
When you actually account for every dollar you spend and see it on paper, it can be a shocker to realize how much you’ve actually spent.
Learn to make a monthly budget, stick to it, keep all your receipts, learn how to balance a checkbook and stay on top of every transaction and you’ll be surprised on how much money you actually do have left to save.
And What to Do about It?
If you follow these simple suggestions you’ll be successful at saving your money, and paying off your debt. When this happens you’ll end up being healthier without that financial stress, being happier and more in control.
Guest Writer Bio: Tracy Stine is a Deaf & legally Blind mother of 2 teenagers. She’s a freelance writer, blogger and Kindle author.