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7 Barriers That Keep Us From Saving Money (and How to Knock Them Down)

  1. Spending too much on housing
  2. No defined budget
  3. The “I’ll save when I make more money” mindset
  4. Lack of measurable savings goals
  5. Student loan payments
  6. Your comfort zone
  7. Overusing credit cards

By Stephen Sellner | Citizens Bank Staff

For some of us, saving money is like flossing your teeth. You know it’s something you should be doing, but life gets crazy sometimes and who’s got the time and you do it once and then it hurts and you swear you’ll get into a routine of doing it every day. Next thing you know, you’re having a less-than-pleasant checkup at the dentist’s office.

OK, enough about teeth. Let’s talk money.

We all have things in life that keep us from saving money. Some might keep you from saving money at all; others unnecessarily hold you back and prevent you from saving as much as you could.

Here are seven money-saving barriers — plus advice on how to knock each of them down.

1. Spending too much on housing

Housing — be it rent or a mortgage — is most people’s biggest monthly expense. But are you taking on more than you should?

The average American spends 37% of their pre-tax income on housing. The general rule of thumb is to pay no more than 30% on housing. Whether you subscribe to that thinking or not is neither here nor there. The point is, since housing is likely your biggest expense, it could be the biggest rock to look under when searching for more money to save.

  • How to knock down this barrier: Is the lease on your downtown apartment expiring soon? Consider living outside the city in an apartment with more affordable rent. Looking for a house? You might be tempted to price yourself up to or beyond your budget. But if you buy a house for less than the top of your budget, you can bank all the money you’d be saving on your mortgage payment each month.

2. No defined budget

We get it; the word “budget” doesn’t exactly excite anyone, but hear us out.

A budget is essentially a financial game plan. It helps you set limits on how much you spend in certain categories. Plus, it accounts for every dollar coming in and going out each month so you better understand how much you could be saving.

  • How to knock down this barrier: Create a budget. List out all your monthly expenses — bills, essentials, entertainment, and more — and subtract that from your post-tax monthly income. How much is left over for saving? How much could you move around to free up more funds?

3. The “I’ll save when I make more money” mindset

OK, so maybe you’re not saving as much as you’d like right now, but things will change when you get that promotion you’ve been working toward, right? Maybe.

Yes, making more money certainly makes saving money a lot easier. But do you expect your expenses to stay the same? Think back to the last time your salary experienced a big jump. Are your expenses the same now as they were then?

This type of thinking could be holding you back from starting to save right here, right now.

  • How to knock down this barrier: Start saving, right now. Even saving $50 a month comes out to $600 a year. Don’t put it off until tomorrow, expecting to have all this flexible income that’ll help you make up for lost time. If you catch yourself thinking this way, remind yourself that as your income goes up, your expenses tend to go up, too.

4. Lack of a measurable savings goal

Some people’s savings plans consist of this: get paid, pay the bills, spend like they normally do, and save whatever’s left. What if you could do things a little smarter?

Saving money is just like any other goal: it’s much easier to achieve it if you specify a target to reach. That’s why people looking to lose weight assign a certain amount they want to lose each month. It gives them a goal to work toward, keeps them accountable, and lets them know if they’re doing a good job or if they need to make adjustments.

  • How to knock down this barrier: Set a monthly savings target. When you hit that target, you’ll feel good knowing that you stayed on track. When you don’t, go back and see what happened and whether you need to make any changes, or if it was just one of those months. Want to go a step further? Set up automatic transfers every pay day from your checking account to savings so you don’t have to choose to save. It’ll be done for you!

RELATED: 5 Ways to Celebrate Your Success

5. Student loan payments

If housing is your biggest expense, student loan payments are probably next in line.

The 2019 average monthly student loan payment is $393, and the median payment was $222. However, you might be paying even more than those figures depict.

  • How to knock down this barrier: Look into refinancing your student loans. It could lower your monthly payment to make more room for saving, thanks to a lower interest rate or extended repayment term.

6. Your comfort zone

It’s hard to add new habits to your routine, saving money included. Creating a budget, following it, setting savings targets — all these things could be new to you, which might be scary. So scary, in fact, that you drop it altogether at the first sign of trouble.

  • How to knock down this barrier: Ease into your new savings plan. Don’t set difficult goals right out of the gate; start small so you can ease into these new habits. Once you get more accustomed to this new way of managing your money, then you can increase your savings targets accordingly.

7. Overusing credit cards

Credit cards provide such great flexibility when making purchases that we sometimes overextend ourselves. Then we get the bill and wonder what the heck happened out there.

And with high interest rates, you’re under a lot of pressure to make your full payments each billing cycle. You’re left to decide between overextending yourself to make the full payment — and thus cutting back on how much you save that month — or paying some of it and getting hit with interest charges.

  • How to knock down this barrier: When you make a purchase on your credit card, do your best to pay it off once it appears on your statement. That way, you keep your bill to a minimum and stay within the constraints of your budget. Another tip? Avoid impulse purchases by giving yourself a day to think it over. If, after that day, you still want to make the purchase, go for it. Hopefully that extra time will keep you from making the completely-unnecessary-but-sounded-good-at-the-time purchases we’ve all made before.

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Are you ready to start saving?

Get help creating your consistent savings plan by stopping by your nearest Citizens Bank branch to speak with a banker today.

Also, with One Deposit Savings from Citizens Bank™, the monthly maintenance fee is waived if you make one deposit of any amount each month.

Get a jump on your journey with one of our savings solutions.

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