I am going to say something that is probably going to hurt your feelings. I’m sorry in advance. But guess what? You suck at saving money.
Sometimes I feel as though tough love is the only answer, and when it comes to financial issues, tough love is almost always the answer. So I’m here to offer you some tough love. Please don’t be upset. I’m your friend, and I just want to help.
Here are 5 reasons you suck at saving money:
1. You “deserve it”
Yes, you do work hard, and yes, of course you deserve to have nice things. But, if having nice things now means that you have a poor financial future, then you are just being childish.
There are only 4 things in life you actually need: food, water, shelter and clothing. Everything else is extra. Everything else is unnecessary (nice to have, but unnecessary).
Get over the fact that although you may deserve the extra things you want, you may not be able to afford them right now. Therefore, you cannot have those things until you are actually able to pay for them.
2. You don’t have a budget
I’ve said it before and I’ll say it again: creating a monthly budget is one of the best things you can do for your financial future. If you don’t have one, you’re likely throwing money away, which means you are unable to save (or, at least, you aren’t able to save very much).
A budget doesn’t have to be complicated. Figure out your what your fixed expenses cost you, set aside at least 10% of your income for savings, and distribute the rest any way you want. Make sure that your savings is treated as a fixed expense. You should always pay yourself first.
3. You live in the moment
There is absolutely nothing wrong with being spontaneous, unless it is interfering with your finances in a negative way. If going out to the bar is important to you, you need to save up money before you can go. If you are at the mall and come across a pair of jeans that you just have to have, you’d better have the money to pay for them.
Give yourself an allowance. I know it sounds totally lame, but they are actually very helpful when it comes to impulse purchases. My husband and I each have a monthly allowance of $50 each (yours may be more or less, it depends on your finances) that we can spend on anything we want. I often spend mine on impulse purchases, such as clothing or fancy snacks. If you don’t spend all of your allowance one month, carry it over to the next month.
4. You don’t make enough money
I told you this article was going to be all about tough love, and some tough love that you may have to accept is that it’s possible you don’t make enough money – and that could be part of the reason you suck at saving.
Figure out exactly what your income is (the amount of money you actually take home) and then figure out what your monthly expenses are. If you are barely making enough to cover your expenses, or you are spending more than you make, you need to cut back on your expenses and you likely need to make more money.
5. You don’t make saving automatic
Never let your entire paycheque hit your chequing account. Ever. Set up an automatic transfer that will send money over to a savings account as soon as you are paid. Doing this means that you never see the savings go into your account, which means you don’t spend it. It doesn’t get much easier than that.
It doesn’t matter how much money you save, as long as you’re saving something. Start out with just a few dollars per month, then bump it up to $20, then $50, then $100, then $200… you get the idea.
Keep in mind that the older you are, the more you will need to be saving so that you have enough money to retire comfortably.
Just because you suck at saving money right now, doesn’t mean you can’t change your habits and become a money saving pro.
Don’t get discouraged, you can do it, and I will be standing right beside you cheering you on.