Why is it Hard to Save Money? (And How to Start)


Disclaimer: The statements made in this post are the opinion of the author. They should not be viewed as financial advice. Please consult with a financial specialist before making any financial decisions.
This post may contain affiliate links, meaning I’ll receive commission at no extra cost to you for your purchase.*

Saving money is difficult, there is no way around it. It is one of those things that takes effort. But even though it is difficult to save money, it is possible. We just need to be pointed in the right direction.

Now when I talk about saving money, I do not mean saving for retirement.

While that is incredibly important, all of that money you have in your 401K will do nothing for you if you get in a bind and bills are due now. Only savings can do that.

Your 401K is also completely useless when your car finally gives up and you need to replace it. Only hard cash savings can really help you in times like these. That makes saving money outside of retirement extremely important.

In This Post
Why Is It So Hard to Save Money These Days?
Why do People Fail to Save?
What is the Most Challenging Part of Saving Money?
How Do I Start Saving Money?
How Much Should You Save Each Month?
How Much Should You Keep in a Savings Account?
What To Do With Money Sitting In My Bank
Start Saving Now
Table of Contents

Why Is It So Hard to Save Money These Days?

Saving money has never been an easy task, but our struggle to save money is different than those who lived one hundred years ago. So what are our current struggles that make it difficult to save money?

1. Consumer Culture

You have probably heard the term consumer culture before. If not, it is basically the idea that our entire society is built to buy things. Which really isn’t false if you take a step back and look at it.

The reason this a problem for saving money is that there is always some new shiny thing to spend our meager savings on.

Another term for this is “keeping up with the Joneses”. This is the idea that you need to look as well off as your neighbor. Which can be anyone with social media these days. When you feel the need to buy what your “neighbor” bought, you are keeping up with the Joneses.

It is very common to fall into this trap. I have friends who have taken amazing trips, or bought really cool trucks, but that isn’t where I am at right now financially. So I just kept saving.

Don’t fall for it.

I’m not one that usually blames society as a whole for my problems, so please note that even though society can point you a certain direction, it can’t make you go down that path. If you are neck deep in consumer culture, that is entirely on you. But the good news is, it is also entirely on you to get out.

You can do it!

2. Not Accounting For Your Money

It is very easy to get to the end of the month and just wonder where your money has gone.
You needed just one (read eight) more thing at the store.
There was a “really good deal” on Amazon.
You went to Costco once.
Whatever it is, you’re money is gone and you don’t know where it went.

If you aren’t aware of your money, then it goes wherever it pleases and not where you direct it.

This is not the same as budgeting. Although budgeting is an important tool, you can’t budget if you don’t know where your money is going. I know. I tried. It didn’t work.

3. Current Constraints On Your Finances

Often times people want to start saving after they’ve been acting a certain way for a number of years. Life has already happened so you aren’t at square one. It is much easier to start from a blank slate. This makes saving much more difficult.

These constraints come in many different forms, but generally speaking they are all some type of debt.

  • A mortgage on a house that is too big.
  • A car loan with large monthly payments.
  • Student loans for that incredibly helpful liberal arts degree.
  • Credit card debt from when your college brain thought credit card meant free money.
  • Also bills that come in every month that you have to pay.

You can’t just start skipping payments to save money. It really isn’t a sustainable plan.

But why does this make it hard to save money?

Why do People Fail to Save?

I’m sure there are many varied and different psychological opinions on why people fail to save money. There are also economic reasons and cultural reasons and so on and so forth. But really it boils down to a few things that I have seen again and again.

First: You Have to Wait

People hate waiting. It is the main reason nobody likes the DMV. Being forced to wait uselessly is just an aggravating thing to be put through. So when we get told to save our money to get something in a few months instead of getting it right now (with no money down and easy low monthly payments) the choice seems like a no brainer.

But is it a no brainer?

When you consider how much you end up paying in interest on those items, it starts to become quite the math problem.

But it is harder than that. Not only do we hate waiting, we’re being trained to expect not to wait.

Think about it.

  • Amazon Prime: Get your package almost immediately.
  • Google: Get the answer immediately.
  • Your Friends: Get a text immediately.
  • Little Caesar’s: Hot n Ready.

Everything we do is about getting what we want now, and to actually save money we have to overcome this urge. It is no easy task.

Second: Maintain Lifestyle

The lifestyle that we live is often influenced by how we grew up. Sadly, most growing up experiences lead to miss use of money.

Many people grow up being able to go out to eat or buy nice shoes and just assume that they can do that too on their entry level salary.

OR you didn’t have those things growing up and you now have your own money to spend so you start spending on those things you never had.

Either way, this is all about maintaining your lifestyle. Once you get used to going out to eat multiple times a week, and buying a new pair of shoes when you go shopping, and getting a new gizmo at the hardware store every time you have a minor problem, it can be quite difficult to rein it back in.

The second problem is that people tend to make their lifestyle more extravagant over time and not less extravagant. This is called lifestyle creep. So not only are savers battling their natural desire not to change, but also the equally nature desire to have a more stuff when you have more money.

Third: Major Fixed Expenses

Fixed expenses don’t change and they come back every single month. Sadly, we purposely tie ourselves down to some of the biggest fixed expenses we can find. Your house and your car, which are 2 of the 3 biggest things we spend money on, are some of the worst culprits.

Fixed expenses are hard to change. You have a large mortgage, a large car payment, debt paydown, insurance, and so much more taking your money each month before you get a chance to touch it.

To do something about your mortgage you have to sell your house. For your car payment you’d have to sell you car. These are not easy decisions, which is one reason why so many people fail to save.

Now that we know why people don’t save, we can start on the path towards saving. Hopefully without falling into any of those pits along the way.

What is the Most Challenging Part of Saving Money?


Honestly, there is nothing else to it. Once you can get started it is much easier to keep the saving momentum.

Just starting on the saving journey has such an empowering feeling that it becomes easier ever day that you save. This means that you just have to do it.

The problem is most people know that saving is difficult so they don’t try. Or they just don’t know where to begin.

Fortunately, I know of an easy way to get started saving which everyone can do.

How Do I Start Saving Money?

To start saving money you have to know where your money is going. In other words, you need to track your spending.

Tracking your spending is the fundamental principle of personal finance. There are many different ways that you can track your spending, but regardless of how you choose to track your spending just start.

Once you are tracking your spending you can become aware of things that you spend money on that you really don’t need to or even want to!

For example, I started tracking my spending at the end of the year when I was switching to a new credit card and everything was fresh. I discovered as I started tracking my spending that my old card was still getting charged monthly.

Turns out I had dental insurance I had completely forgotten about and never used. I would have saved hundreds of dollars by cancelling it because we assumed we didn’t have dental that whole year. We wouldn’t have even known to use it if we had needed it.

That’s the power of tracking your spending.

Now that you have found some things that you don’t need to spend money on, stop spending money on those things and instead put it aside for savings.

One easy way to do this is to set up an automatic withdrawal from your checking account to your savings account every month.

Another way to do it is to set up a split paycheck with your HR department. Many of them can send a portion of your check to another bank account. This way you don’t even realize that you have that money before it is in savings.

Automate your money and you won’t have to worry about saving.

If you don’t know where to start cutting expenses, here is a short list of things people commonly overspend on.

  • Eating out: Are you eating out daily when you could make food cheaper at home?
  • Recurring Subscriptions: Do you even watch Netflix and Hulu? How about the gym?
  • Food: Are you buying overly expensive food?
  • Clothing: Do you need the newest, brand name thing?
  • Utilities: Are you trying to reduce your utility bill?
  • Insurance: When is the last time you shopped around?
  • Entertainment: Did you really need to see that movie in theaters twice?
  • Electronics: How often do you really need a new one?

Not all of these will apply to you, but hopefully this help you think about what is and isn’t important that you spend money on so you can cut those things and start saving.

If you still need help, check out these frugal living tips.

How Much Should You Save Each Month?

The short answer is as much as you possibly can.

Now that we understand that, let’s take a step back.

According to the fantastic book The Richest Man In Babylon by George Samuel Clason*, you should at least save 10% of your income. Always.

So as soon as you get a paycheck, 10% should be going into your savings account before you even consider spending it.

Now if you are currently living paycheck to paycheck, saving is difficult, let along saving 10% upfront.

So I recommend starting with what you can save easily, then pushing yourself to 10%.

Once you hit 10% ask if you can do more. Many of the most successful people save between 40% and 60% and I’ve even heard some some people saving as much as 80% of their income!

Now, this is much easier on two incomes, and without kids, and when your fixed expenses are small. So don’t beat yourself up too much if you fall into one or all three of those categories. Just do the best you can.

And don’t worry, the kids will be worth it.

How Much Should You Keep in a Savings Account?

When it comes to savings, what you have in the account is usually less important than what you are putting into the account each month.

However, the financial guru Dave Ramsey suggests getting $1,000 in savings before you do anything else. Even before paying down debt. That is a good place to start.

I would recommend having one month worth of expenses in savings instead because $1,000 won’t cover you in any really dire circumstance, but you can choose whatever fits your needs.

Now that you have hit the bare minimum, what should you keep in savings beyond that?

Before we can answer that we need to understand what savings means.

There are actually two different types of savings accounts that you should be aware of. Your regular savings and your emergency fund.

These two savings accounts should be entirely different than your checking account. If you are trying to save money in your everyday checking account you will almost certainly fail. It is just too tempting to spend what is there.

Instead put these accounts into an actual separate savings account, or better yet in another bank altogether.

I keep my saved money in an online bank which makes it much more difficult to access. This helps me keep saved money saved.

Now that we understand that, let’s consider how much money you should keep in your savings account and your emergency fund.

What to Keep in Savings

Your main savings account is like your money storage box or your piggy bank. It is where you keep your extra funds until you need them.

This can be for a wide range of reasons. You could be:

  • Saving for a house
  • Putting money aside for a trip
  • Trying to buy a car in cash
  • Holding extra money each month to pay for yearly expenses
  • Holding money for some extra expenses (like needing new shoes)
  • Holding money until you need it for a slightly better interest rate
  • And so much more

Since the uses and needs of a savings account depend so much on you and your current situation there is no single answer to the question, “How much money should I have in savings?”

But I would recommend totaling those expenses you are saving for, and adding extra for unexpected small expenses as a starting point.

Your savings amount will be a moving target, but just keep up with how much you need to put in each month to get there and you will have what you need.

Some bank accounts allow you to put your money into customized buckets to help you keep track of it. If you have multiple savings goals that would be a great way to keep your money straight.

What to Keep for an Emergency Fund

Unlike savings accounts, emergency funds are actually quite easy to figure out. The point of an emergency fund is to have money to cover unexpected expenses and emergencies.

Unexpected expenses and emergencies include:

  • Medical bills
  • Car repairs
  • Replacing appliances
  • Loss of job
  • Death in the family
  • And more

Calculating what to keep in an emergency fund is pretty easy, it just depends on how comfortable you want to feel.

Usually people recommend 3-6 months worth of expenses.

That is not 3-6 months worth of income. If you make $3,000 a month, but only spend $2,500 a month your 3 month emergency fund would need to be $7,500 and not $9,000.

I would say 3-6 months is good if you are less likely to have an emergency.

But if you have a fair number of debts, or a couple of mortgages, or tend to have medical bills, or any other situation that could cause you problems for a few months, then a larger emergency fund is recommended.

A great example of this is the recent pandemic. Plenty of people were still employed, but furloughed for a few months. Having that emergency fund for 6-9 months or even for a full year would have made that experience much easier to handle.

Here is another way to think about it.

Your SituationSize of Emergency Fund
Have a stable, essential job. Very Healthy. Paid for vehicle and low expenses.3-6 months of expenses for everything you pay out.
Pretty stable job. Mediocre Health. Larger monthly expenses.6-9 months of expenses for everything you pay out.
Freelance/gig work that could dry up. Unhealthy. A lot of monthly expenses (like multiple mortgages)9-12 months of expenses for everything you pay out plus your out of pocket maximum for your health insurance.
General Guidelines for Emergency Fund: Consult Your Financial Advisor For More Specific Guidance

These guidelines are very general, so you need to decide what is right for you. But your emergency fund should be quite large so you can handle large emergencies without becoming stressed out or relying on the government for assistance.

What To Do With Money Sitting In My Bank

You’ve started saving and your money is growing quickly. You have an emergency fund built up. Your debts are paid off. And you feel pretty good about yourself.

But then you look at the interest rate that your money is getting and you are suddenly very disappointed.

0.1% on your savings is hardly doing a thing. So what should you do next?

This is when saving starts to become investing. Once you’ve reached the point where putting money in your savings account isn’t getting you any further you will need to start investing or you will fall behind.

Now let me make something very clear. Your regular savings account and your emergency fund should both remain completely full and untouched. Having cash on hand for emergencies and for other large purchases is important to good financial health.


Okay, with that cleared up we can quickly cover investing.

There are many ways you can invest your money, but here are a few different rules of thumb to follow when you starting to consider investing.

  1. If you employer offers an employer match, take it.
  2. Check the fees on your investments, if they are above 1%, shop around.
  3. Don’t put all of your eggs in one basket. Index funds do this well.
  4. The farther you are from retirement, the higher the risk you can take.

If you want to know more about retirement investing, check out my retirement investing basic post.

Also, real estate can be a good option for investing for many people.

Start Saving Money Now

Even though it is hard to save money, you just have to do it. If not, your finances will never improve. Even people who win the lottery will become poor again if they don’t have good money habits in place.

To recap, this is how to save money:
  1. Track how much you spend and on what for a month.
  2. Identify things you spend money on that you can cut.
  3. Stop spending that money and put it into savings automatically.
  4. Get $1,000 (or one month of expenses) in savings.
  5. Eliminate any debts you have.
  6. Start saving towards things you want to buy and future expenses.
  7. Build an emergency fund that fits your needs.
  8. Start investing any additional money you have.

Saving money is difficult, but if you follow these steps you can do it!

What other tips do you have for saving money? What other challenges do you have saving money? Tell me about it in the comments below.

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A list of definitions used on this blog can be found here.

Consumer Culture: The idea that our entire society is built around buying things. This is one of the reasons that saving is so difficult and why good financial principles aren’t more widely known.

Lifestyle Creep: Also called Life Style Inflation, it means that you increase your expenses exactly as much as your income increases (if not more), this is usually gradual or unnoticeable with each small raise and it gets people into debt or at least living paycheck to paycheck.

Fixed Expenses: Monthly expenses that are consistently the same amount. Examples of this are mortgage or rent, car payment, and insurance premiums.

Savings Account: Where you place money while you are trying to save up for an upcoming expense or to have on hand when needed that isn’t your regular checking account. It is different than an emergency fund.

Emergency Fund: Money set aside to be used in emergencies only. When you use money from your emergency fund you will need to replenish it as soon as you can.

Investing: Giving an entity (or an individual) money whether in the form of stocks, bonds, or buying any other type of asset in hopes of getting more money back in the form of interest.

Employer Match: When an employer will match the amount of money you contribute to your retirement account up to a certain percent (usually between 3-5%). So if 5% of you income is $500 and you contribute $500, your employer would also contribute $500 and you would have $1000 saved.

Index Fund: A way to invest in stocks that puts a little bit of your money into every company listed in that index or list of companies. For example, the index could invest in all companies in the S&P 500 or all publicly traded companies, etc.

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