Why Americans Fall Behind on Savings

Everyone tells you to save money. But it’s not that simple. If it were, we’d all be rich.

Saving is hard, especially since there are certain things working against consumers. Here’s why Americans fall behind on savings.

Things Are Getting More Expensive

It’s not just your imagination. Things are getting more expensive for consumers.

This is due to price increases in essential goods combined with stagnant wage growth.

The fact things are becoming harder to afford makes it much more difficult to save money.

In fact, almost 40 percent of people cited “expenses” as the top reason they’re unable to save more.

It’s important to remember it’s not always your fault you’re not able to save more money.

Not Everyone Learns Good Financial Practices

There’s another huge reason many people are at a big disadvantage with saving. They never learned how to do it the right way.

Some people are lucky to have parents or other mentors who teach them the best ways to save money.

But this isn’t the case with most people. And if you don’t learn those best saving techniques, you’ll have a harder time implementing them in your life.

People who have little background in financial literacy should consider taking a class on some basics.

There are lots of free courses out there for people who want to improve their financial skills, in a wide range of topics.

They Don’t Use a Budget

If you’re having trouble staying on top of your finances, you need to consider the benefits of creating a budget.

This isn’t just something you do in grade school for a class project.

Budgeting really works.

There’s a reason why all the most successful companies in the world are obsessive about their accounting.

They want to see exactly where money is coming and going.

The same principles can be applied to your own budget, just on a much smaller scale.

Start by totaling up your income and expenses and dividing each between your fixed and variable amounts.

For example, your full-time salary is likely fixed income, while driving Uber on the weekends would be variable.

Once you’ve totaled up your incoming and outgoing cashflow, it’s time to see where you can cut expenses.

You should also consider the potential benefits of using a budget planner tool.

There are apps you can download onto your smartphone that will keep track of your budget, while also giving you suggestions for cutting costs.

Clarity Money is one of the top examples of this type of service.

It’s free and offers tons of helpful services for its users.

Haven’t Felt It’s Time to Start Yet

A lot of people haven’t started saving simply because they think it’s something they’ll get to later in life.

While there are certainly valid reasons for putting off saving goals, doing this for too long can seriously hurt you in the long term.

Many just end up spending all the money they have leftover from their paycheck after taking care of expenses.

If this sounds like you, it’s a good idea to automatically have some money go to your savings.

Most of the time, you won’t even notice when that little extra is missing.

Too Much Debt

Debt is another massive factor that gets in people’s way when it comes to saving money.

It’s tough to put extra money away when it seems like all your income is going straight to loans. There are a few things to consider if you in a similar situation.

First, see if you can renegotiate any of your loans to a lower interest rate. This can save you a ton of money both in the short and long term.

You should also try to take a strategic approach to your debt. Find an approach that works for you—such as the snowball or avalanche methods—and stick with it.

People are always insisting you should be saving more money.

But it’s hard. Life isn’t always so cut and dry that you can just go to work, save money, and live happily ever after.

Consider some of obstacles getting in the way of your saving goals, and try to find ways to overcome them.