Saving money can be tricky.
Our current spending takes precedence over saving money for the future. There is always one reason or another why we cannot save more.
But that does not mean that you will be doomed to have negligible savings forever. Here are four common roadblocks that keep people from saving money and solutions to overcome what’s holding you back.
How to overcome the 4 obstacles to saving money
Chances are, you can identify with one or more of these common obstacles to saving. It is time to overcome these financial hurdles.
Barricade n. # 1: there is never enough money left to save
If you’re waiting until the end of the month to save your unspent paycheck, you’re doing it wrong.
Make saving money a priority by paying yourself first. When you get paid, make it a habit to put money into your savings account before you pay the bills or go shopping. Better yet, adjust your direct deposit so that a portion of your pay automatically goes to your savings account.
To find out how much you can realistically save, you need to create a budget. By tracking your spending, you’ll see how much of your paycheck goes to necessities, what goes to nonessentials, and where you can cut back for funds to save.
If you’re not sure how much you should save each month, try the 50/30/20 budgeting method, which recommends using 20% of your take-home pay to save or meet other financial goals.
Even if you can only save a little each month, getting into the habit of saving money regularly every time you get paid will help your savings grow.
Barricade n. # 2: saving money is no fun
We will admit it. Saving money is not the most exciting task out there.
When saving feels like a burden or punishment, it’s hard to stick with your plans.
One way to make it easier is to propose SMART goals: specific, measurable, achievable, relevant and timely.
Having a SMART savings goal establishes a sense of purpose for saving and helps you see your way to reality.
Saying “I want to save for a trip in October by saving $ 200 each month” will encourage you to save. Simply stating that you want to save more money this year, without requiring any specific urgency or action, makes it easy to fall out of the car.
Another way to make saving money more attractive is with a money challenge. Challenges like the Five Dollar Challenge or the 52 Week Challenge play the game of saving money. Enlist a money buddy to do the challenge with you and further encourage you to save.
Barricade n. 3: I always end up taking advantage of my savings
You will not be successful in saving if you set aside money just to turn around and spend.
Sure, the money you save is meant to be used. Finally. The problem occurs when you cannot limit your savings.
Separating your savings from your main checking account can help. You don’t want it to be easy to transfer money from your savings.
Deposit your savings in a separate account that you will not be able to access easily. If you have a debit card for that account, destroy it. Consider putting your money in an online-only bank rather than the financial institution around the corner from your home.
You may even want to open multiple savings accounts so that you can separate your emergency fund from other savings. You can further divide your other savings for different purposes, such as saving for a home versus saving for the holidays.
Obstacle n. 4: I can’t afford to save because I live paycheck to paycheck
When your income only covers your expenses, the only option is to increase your income.
Consider choosing an additional job or two and putting that extra income into your savings. Or sit down with your boss and explain why you should get a raise.
Changing jobs to get a higher paying position is another option. Be sure to negotiate your salary to get the best deal.
With your new income increase, make sure you don’t give in to lifestyle inflation. Keep spending like you did before and save your extra money.
Nicole Dow is a Senior Writer at The Penny Hoarder.