Back when I knew very little about money management, I believed that if I earned more money, I would solve all of my financial problems. I eventually received several raises and higher-paying jobs, yet my financial problems persisted. No matter how much my income increased, I could never save money. I thought that the increases weren’t big enough, but they were.
I couldn’t get a grip on my finances, and I had no idea what was the root cause. It seemed like the universe was conspiring against me to ensure that I would fail financially. Not once did I think that I was the cause of all of my financial problems. Surely it couldn’t have been me? But it was.
Once I examined my spending habits, attitude towards money and the things that I valued, I realised why I was not saving money.
Here are some of the challenges that held me back. I think you’ll find that some of them apply to you, if not all of them.
Saving Isn’t a Priority for You
Gasp! But how can I say that? Of course you want to save money. That’s important to you. Well, your actions show otherwise. I also thought that money was a priority to me until a friend of mine told me to look at my lifestyle.
It turns out that saving wasn’t a priority for me. I valued other things more such as status and comfort, which is something that my expensive apartment and luxury car provided. I spent money on those because I wanted to appear successful. Other people’s approval of my material possessions meant more to me than saving money by driving a regular car and living in a mediocre apartment.
I could’ve downgraded my lifestyle and lived just fine, but I wanted possessions that would elevate me to a higher level. The problem is that those possessions were expensive. Whenever I had to make a choice between opting for a regular purchase or a fancy one, I’d choose the latter because I got pleasure from owning items made by well-known brands.
This is actually a common problem that many people have. It’s slightly less of a problem when you’re buying expensive items with cash. But I didn’t. The items I purchased were out of my budget, so I financed them. That brings me to…
You Have Too Much Debt
How much debt is acceptable? None. The best debt is non-existent. I’m debt-free, and I can tell you that it’s one of the best feelings in the world. But if you’re going to have debt, then it should only be a house mortgage. That’s it.
The biggest problem with taking on one debt is that you see the value that it adds to your life, and you want more value. So you take on more debt. Why stop with a house mortgage when you can also have a fancy car with vehicle finance and the latest gadgets paid for with your credit card? Because having debt payments limits your savings. The more debt you have, the less you’re able to save.
I had vehicle finance, a personal loan, an overdraft, credit card debt, and I even owed a creditor for my furniture. That’s too much debt. Having debt means that your income comes in and then immediately goes out to the different creditors. So, please, explain to me how you can have savings if the majority of your income is going to the banks and other lending institutions.
You Haven’t Conditioned Yourself to Save
Remember when you were a small child and you rode a bike for the first time or got into the pool? I’m sure that you’ll recall being scared. Those activities were new to you. You probably fell off your bike the first time, and you cried when you got in the water. You were in unchartered territory and had no idea what to do.
But the more you rode your bike and the more you swam, the easier it got. Until eventually, those became second nature. The reason those became second nature to you is because they were a habit. It’s something you did over and over again.
Saving money is a habit.
One of the biggest reasons people don’t save money is because they haven’t conditioned themselves to do that. You need to develop the habit of saving money, and over time, you condition yourself to save.
But how do you develop the habit of saving when you don’t have any money? Reduce your expenses. You’re most likely living a life above your means, and there are definitely expenses that all of us can reduce or eliminate to have more money at the end of the month.
This will require you to lower your lifestyle. I know, that’s tough, right? Well, that’s what is required for you to have money at the end of the month. Receiving a raise or a higher-paying job isn’t going to do the trick. You’ll always find a way to spend that additional income, leaving you with nothing to save.
The long-lasting solution is for you to condition yourself to save money. When saving money is entrenched in your core, you’ve conditioned yourself. How do you know you’ve reached that destination?
Once you condition yourself to save money, you’ll look for ways to back out of a purchase or buy a cheaper alternative. Your first thought will be, ‘Uh-oh. I probably shouldn’t go down this road. It means I will have less money to save if I buy this.’ That’s a vastly different mindset than a spender, who thinks, ‘Oh, man. My salary increase means that now I’ve got more money to spend. Awesome! I should definitely treat myself with something nice.’
Final Thoughts
It takes common sense to save money. You don’t need a degree in Rocket Science to figure this stuff out. I haven’t provided any Earth-shattering information. But I may have opened up your eyes to what you’ve been doing incorrectly. And if you want different results, you’re going to have to do things differently.
Saving money requires sacrifice. But it’s so worth it. Nothing beats being debt-free and having significant savings. Now, that’s awesome!
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