Ever have those periods of time where you feel like your finances are getting out of control? I'm not even talking about being in loads of debt, either. I'm talking about those weeks or months where you spend way more than you intended. You whip out the credit card for every little purchase, thinking you'll rack up points. Later you to realize you have a big ass bill at the end of the month you didn't want.
Saving money consistently can be hard. Especially if you don't have a plan. Here are 10 reasons you can't save money, and what to do about it going forward.
1. You don't budget
Knowing where your money is going is crucial. This doesn't mean that you have to put together a formal, strict budget, though. If you're a little OCD, you'll do well putting together an organized budget. Use a service like You Need A Budget (YNAB). I'll be honest, I don't budget. I do the non-budget budget. But the latest YNAB update has me reconsidering.
I actually did a bit of a trial run with it this past weekend. But more on that later... If you're not budgeting your money in any way, you'll never save enough. To put it simple - you need to live below your means. This means you need to spend far less than you earn. If you don't, you'll never retire... at least not comfortably.
2. You don't automate
Not automating your finances will kick your ass in the long run. By not putting your money on auto-pilot, you're increasing your decision fatigue. Jim Wang is the blogger behind the kick-ass blog, Wallet Hacks. He says automating your finances is one of the most critical financial moves you will ever make. I don't know about you, but when a guy who sold his blog for $3 million gives an opinion, I listen with an open mind.
3. You don't use cash
Cash has plenty of benefits. My favorite one of all is that it's finite and visual. Once it's gone, it's GONE. Set aside a certain amount each week to use as 'blow money' or 'fun money' (whatever you want to call it). This way you'll know exactly what you can and can't spend. This also plays into the concept of guilt-free spending. You should be able to buy things you want without feeling horrible about it. Just like dieting, though, keep it in moderation.
So if you're not using cash, it might be a sign of why you're broke. Nobody gets rich by going into debt (and with cash it's quite hard to!).
4. You don't set goals
How in the hell do you expect to save money if you're not setting any goals? Goals are so important with money that it's the first thing I ask someone when they say they're broke.
"Chris, I have no money"
"Well have you established any goals?"
"Umm... I have not."
Well there ya go. Setting goals is not only important, but it can be fun as f*ck. I've done a prosperity picture, my buddy Even Steven drew a thermometer-type thing, and many other people just straight color in flower thingies! Whatever works for you, do it. But you need to have some sort of plan in advance so you know what you're working toward.
5. You don't bargain hunt
Convenience is a money killer. I'll admit, there are far too many times that I pay a premium for something just because it's convenient. When I do this, though, it's usually because I'm in a rush. I am buying something I didn't put a ton of thought into before. This could be an impulse buy or just something I waited to buy without doing any research or comparing. It may also be something that I think adds to my quality of life, only I miss that crucial step of walking away to think.
Bargain hunting doesn't mean scouring every website for the best deal. You may find an incredible deal from a company you've never heard of online, only to find your credit card number stolen days later. It also doesn't mean you have to research until your eyes bleed. You don't have to read every single review out there. And you don't have to ask everyone and their mom what to do.
All bargain hunting means is that you're finding balance. This usually means balance between time invested and time to buy.
For instance, if you're spending 10 hours researching something to save a few bucks, it may not be worth the time investment. But if you're spending 10 hours gathering valuable research to buy the best product available at the best price - it's bargain hunting. So if you're buying the most convenient product or service without looking for a good deal, you're wasting your time. You'll end up broke. Find a good balance between investing time and wasting time when buying something.
6. You don't use coupons
Some people love 'em, others don't bother. The ones who love 'em and know how to use 'em are the ones that save the big money. Now, just like the point above - there needs to be balance. You shouldn't be wasting hours upon hours clipping coupons to save 10 cents. That makes no sense. If you're not into using coupons at the grocery store, just try to give it a chance. Check out my article on couponing tips as well as getting coupons by mail for more information.
There is another way to save with coupons, too - coupon codes. I'd be willing to bet you use coupon codes when buying something online. We all do. Instead of Googling 'Pottery Barn Coupon Code', just use the browser add-on app Honey. It'll auto-pull coupon codes for you at checkout time to find you the best deal possible. So if you're not using coupons in any way - you're wasting money.
7. You don't buy in bulk
The primary reason I see people not buying in bulk is because of the up-front cost. If you use Costco or other membership stores, you pay a fee. Plus everything seems so expensive, right? Wrong. Products may seem more expensive, but it's because you're getting more of it. Compare the per unit or per ounce cost of what you're buying against your local grocery store.
Wholesale almost always wins.
When we buy in bulk, manufacturers can unload more of their products and use less packaging. The model just works. You get more of a product for less. It'll last you longer. But you'll pay more up front. You also won't have to make as many trips to the store when buying in bulk. So consider that little nugget.
One caveat to consider, though... buying in bulk takes up valuable storage space. If you live in a small home with little storage, this may be an issue. In this case you may not want to buy things in bulk that you don't use often. Stick to things you'll use within the month.
8. You don't live in a small house
If you live in a big ass house, it's not surprising you can't save money. So many of us work our whole lives to pay for a house that, in the end, nobody actually cares about, except us. Downsizing your home is a lot easier said than done. But that doesn't mean you can't start living smaller now. First, work on decluttering your home to clear out some space. Get rid of as much crap as you can.
Meanwhile, focus on paying down your mortgage as much as you can so your home has some equity. This will make it easier to sell once you decide you don't need that big fucking palace. Honestly... it's kind of a joke how much we spend on our mortgage payments. This article on The Motley Fool breaks down mortgage costs by age and all kinds of other good stuff.
9. You don't drive a small car
It's like we're embarrassed of having an inexpensive, fuel-efficient car. I drive a Honda Fit and I'm sure people think it's a clown car and I can't afford much more. But when I'm getting 40+ miles per gallon, who gives a shit. Cars are the biggest waste of money in my opinion. They are not an asset. They usually do nothing but decline in value.
Would you buy a stock that was sure to decline in value over the next few years and never again reach it's original price? No, you absolutely wouldn't, sir. So if your car is too big and guzzles gas, or if your car payment is ridiculous, sell it. Sell it and get something used and fuel efficient. If you think a car is more than a means to get from point A to point B, you have some serious financial soul-searching to do.
If you think a car is more than a means to get from point A to point B, you have some serious financial soul-searching to do.
10. You don't eat smart
This may be the biggest money-suck on the list. If you're not shopping smart, you're blowing huge money out the window. What is shopping smart? It means you're prepared with a list of things you actually need. Not just buying a ton of crap that looks tasty and is convenient. Try using a service like eMeals or The Fresh 20 if you're too lazy to build a list yourself each week. They'll do it for you, and even though it costs a little money, the time-savings and long-term money-savings is great.
So here's the thing, guys. We all make money mistakes. I'm sure you've slipped up a month or two and spent way more than you wanted. It happens. But knowing these 10 reasons why you can't save money will give you a start in correcting those errors. Start planning and know where your money is going. Know that it's okay to screw up every once in awhile. Just remember to get yourself back on track.
What reasons do you have for not saving money? Please share them in the comments below!