If you are unhappy with your current savings account balance, you are not alone. Sources state that approximately three-quarters of Americans have little or no money saved in an emergency fund for a rainy day.
In addition, approximately one-third have no money saved for retirement, and even more, believe that their retirement account balances are not adequately funded.
With this in mind, it is not surprising that one of the top New Years’ resolutions relates to increasing savings levels.
However, if you are struggling to save money, considering why you are challenged is an important first step. A
After all, once you understand why you are not saving enough money, you can make the necessary changes.
1. Insufficient Funds To Save
Many individuals live paycheck to paycheck because they lack savings. This creates a stressful lifestyle that can cause anxiety and grief. Some state that their inability to save relates to their tight financial situation, and you may feel caught in a catch-22 situation.
After all, how can you save money if you do not have money available to stash away?
However, many can reduce their cable or cell phone plan to free up a few dollars each month. Other options include refinancing the car to get a lower car payment, reducing the number of meals you eat out and making energy or water-saving improvements at home.
When you save even $10 or $20 per paycheck, you can slowly but steadily build an emergency fund that you can rely on when the need arises.
2. Failing To Make Saving A Priority
While some state that they do not have funds available, the truth is that many people have the money available.
However, instead of saving money, they whittle their funds away with unnecessary purchases.
When you make savings a priority with each paycheck, you will indeed see your account balance grow over time. One of the easiest steps to take to make savings a priority is to set up an automatic funds transfer for an affordable amount with each paycheck.
This makes savings effortless and relatively painless.
3. Not Understanding the Importance Of Saving
Studies have shown that there is an indirect correlation between an individual’s savings rate and debt level.
The higher the person’s savings rate, the lower his or her debt level may be. One reason for this is because those who have money in savings can use it for family vacations, emergency expenses, and other purposes.
When savings are not available, the individuals commonly rely on credit cards and loans to fund these expenses.
Saving money regularly can have a significant, beneficial impact on your financial standing. Because of this, you should find money to save and make an effort to save regularly. Some individuals may have 10 percent, 20 percent or more of each paycheck available to save.
Whether you have a considerable amount available or only a few dollars, the fact is that saving money is highly beneficial.
Consider the reasons why you may not be saving money, and implement the right strategy to help you overcome your challenges