4 Top Challenges of Saving Money and How to Overcome Them

The importance of saving cannot be denied, but many challenges prevent us from doing so. It is largely our spending habits, our attitude towards life and the future and our inability to track our spending that pose significant challenges in our quest for saving some money for the future. Let us talk about some such challenges and find ways to overcome them.

Expenses are More Than Our Income

The most common reason for not saving is that the cost of living has risen sharply while salaries have remained at the previous level. This makes setting aside a small amount every month in our savings bank accounts difficult. This problem can be solved by adopting zero budgeting and finding a justification for every expense that we incur. This will help us cut down on some expenses and thus leave scope for setting aside some funds.

Not Tracking Your Spending

Our inability to keep track of the various expenses can play havoc with our plans of saving for the future.  A regular tracking or recording of our expenses will help us in analysing areas where we are overspending and taking steps to cut them. This will automatically boost the chances of putting money in your savings account. 

Spending to Impress Friends 

Again, our tendency to buy based on our likings and not needs affects our expenses and savings both. Similarly, many of us tend to spend more when we go out with friends or wish to impress someone. Again, this problem can be solved by setting a budget for every outing that we go for and sticking to it. Planning our finances in such a way that we take into account all our expenses and ensuring that we don’t go overboard can motivate us to save for the rainy days.

Not Understanding the Benefit of Interest 

A major challenge in front of our efforts to save is the inadequate understanding of the benefits of savings and the interest rate earnings on them. This situation can be rectified by studying and understanding the benefits of opening a savings account to collect money to fund a future expense. The power of saving is best realized when can use our savings to buy something we have been yearning for long.

A major problem that affects our ability to save is the fact that we often do not give it a priority and instead treat it as a possibility. We can succeed in achieving our saving targets only when we make them our priority. This will force us to review all our expenses, cut down on the non-essentials, and set a target. 

Another factor that can encourage us to save is planning for the future and setting goals. This will set us on the path to find ways to achieve these goals via savings and investments. The moment we realize the importance of building a safety net for the future and understand the advantage of saving account interest rates we can start saving diligently.