10 Things To Do If You Have No Savings (and why you have trouble saving)
Updated 01/15/2023
One of the main reasons financial anxiety is triggered stems from a lack of financial security.
For many of us, including myself, feeling comfortable and secure in life is linked to how much we have saved, how many resources we have access to, and knowing which financial plans we are moments closer to reaching.
A lot of what is taught in urban communities revolves around seeing your wealth. It’s the jewelry, cars, newest outfits, and flashy vacations that represent how much money you have.
There is nothing wrong with treating yourself.
Investing in your happiness through material things is often looked down on in the personal finance community but the truth is… personal finance is personal.
Not everyone desires to live frugally just as not everyone finds enjoyment in spending money freely.
However the extremes of spending too much or spending money on the wrong things can lead to a sad reality for many. According to Cnbc 51% of Americans have less than 3 months of expenses saved.
Keep in mind surveys like the one mentioned above do not account for the many undocumented people living in the U.S who are in the same situation.
There are a lot of different reasons for why you or someone that you know could have trouble saving money and there are just as many ways to improve your relationship with money.
What's Ahead:
-Fomo
-YOLO
Why Do I Have Trouble Saving?
You’re not ready to make sacrifices
A financial sacrifice could look like leaving a job that pays more upfront for one that allows you more room to move up later on.
You would be taking a temporary loss of pay for a much bigger return long term.
A sacrifice could also look like skipping buying food once a week in exchange for eating the food you bought when you went grocery shopping.
Related read: 21 ways to save money while grocery shopping
Too many bills
Living below your means is the key to building wealth.
You avoid running into money trouble when you cut out the unnecessary spending. Why do you need several tv subscriptions if you only watch a few hours of tv a week?
Keep in mind if you find that there is value in having different subscriptions then by all means continue to subscribe to them.
But buying things that have purpose even when it comes to your bills is how you figure out what you need to have a happy fulfilling life
Missing something to save for
Money anxiety can lead to all sorts of money trouble.
One often forgotten symptom of financial anxiety is that we stop finding new ways to be excited about money.
We don’t create sinking funds for Christmas or save money for a volunteer trip.
When you get into a financial funk and life becomes full of woes, you’re less likely to want to save money.
Even if you logically understand that money is important, it’s not enough. You need something concrete, even if it's just a vision you have in your head for now, to work toward.
FOMO (Fear of missing out)
Keeping up with the Joneses aka spending money to impress others or earn friendship is a big reason that people struggle to save money and build wealth.
When you build wealth you aren’t just saving all your money in a savings account you’re also investing into a brokerage fund like Fidelity, and making financial goals that motivate you to build your income as well as pursue more in life.
FOMO can sneak up on you in different ways.
If you go out with your friends and spend money when there was even an inkling that you didn’t want to go… chances are you are experienced a classic fear of missing out.
YOLO (You only live once)
YOLO is a combination of immediate gratification and consequences that aren’t considered.
Allowing your bank account to go into overdraft simply because you can? YOLO
Spending money BEFORE you pay yourself first or even pay your bills? YOLO
And if you live your life without considering that you will one day become old, not be able to work anymore, or not want to work, those moments will be here and you will be unprepared.
It’s the worst feeling to be in money trouble because you didn’t prepare financially for retirement, holidays, or even the days between your next paycheck.
Not thinking of the future can cause you to no care much about who you will be in 10 years.
Frequent Dipping
Some people are able to save a few bucks here and there but fall victim to emergency dipping.
Emergency dipping is when you have money put away for a rainy day but you take money out of it more frequently than you put in.
Learning how to save is just as important as learning how to keep money saved.
Not looking at the big picture
Saving for retirement is important, figuring out your path to building wealth, knowing what money moves you need in your life, and what financial habits are key to success make life better.
But saving $20 every two weeks and buying fractional shares to increase your net worth can be tedious.
It can feel like not enough especially if you start to compare yourself to someone who is already where you want to be.
How can I change my finances
Now to the fun part! On top of implementing new financial habits you can jump into action and shake up your financial situation.
See what’s happening with your finances
Calculate your networth
For this step you’re going to need to break down your finances into the bare bones of what your spending habits are and what you would like to do.
First you will add up all your liabilities. This would include debt, bills you pay each month, people you owe money to, and anything else that takes money out of your pocket.
Next you will add up your monthly income.
This may need to be done a few times if you have a fluctuating income. Keep this number in a separate area because it will be needed later when you start to create your simple budget.
Add up any other assets that you have. This can include the total value of your retirement accounts, brokerage accounts, and any other items of value that you might have such as jewelry or your home.
When you subtract your liabilities from assets you have your net worth.
It’s okay if your net worth is negative for now.
This is the case for a lot of people with student loans, or debt, or those who simply do not know how to save money.
But knowing your net worth will show you what you’re working with.
Create a simple budget
Part of figuring out how to save more money or start your emergency fund is budgeting.
You can try my favorite simple budget which includes automating your savings and bills, and then mindfully spending what is left over.
I keep my overdraft turned off so I can only spend the money that I have.
Another option for people who enjoy keeping a stricter budget is the 50/30/20 budget.
Build an emergency fund
An emergency fund is money saved for your definition of a crisis. Part of learning how to build wealth is creating a financial cushion.
Rainy day funds are CRUCIAL to being able to save more money. Initially you’ll aim to save 3-6 months of your expenses.
Remember to celebrate your first $1000 saved because this is a huge win
This money can cover any money trouble surrounding car repairs, broken items, bills, and medical expenses. Whatever you consider an emergency is what your fund is for.
You can also use your emergency fund for covering days off from work or absence from a job.
Think of future events (sinking funds)
Saving for christmas causes financial anxiety because most people shop without thinking of what they can actually afford.
Filling up the tree and obtaining thousands in debt or becoming behind on your bills isn’t worth it if you think of the bigger picture.
You celebrate your loved ones with gifts, it’s how you show you appreciate them.
But those who are in your life because they enjoy your presence will understand if you set a budget for Christmas time or give them a thoughtful gift instead of a new Apple Watch.
Make financial goals
Long term, short term, and mid term goals are motivating. Even if your goal is to save $50 from the next paycheck, it counts!
Goals help you to also see when it’s time for a lifestyle change.
Everyone has to start somewhere. If you want to read up on a simple guide for setting financial goals (that you can achieve) check out our blog post; How to set financial goals.
Extend yourself compassion
Be nice to yourself on your financial journey. Compassion looks like accepting that financial anxiety exist and that you are not alone in your struggles.
When it comes to changing your mindset begin by knowing whatever has happened to you currently is in the past and now it’s your job to move forward.
Everyday is a set of decisions.
How to increase your savings
Automate your savings
Automation is the key to keeping your budget simple and your path away from money trouble.
Automate the money out of your main account and into your savings account each time you get paid.
This takes the emotion out of of saving because the money isn’t in your account when you open the app.
Think of it as missing a day at work, and having to adjust.
You can also automate your investments to make buying whole or fractional shares much easier.
Set up different bank accounts
The high 5 bank account system includes opening up multiple bank accounts for each type of bill you have.
You might have one account simply for paying Conedison and another bank account for family necessities like groceries and child care.
This helps you to make sure that if your rent is $1000 that bank account A has exactly $1000 deposited into it.
It’s a digital version of the cash envelope system (separating your cash) which people also utilize when figuring out how to save.
Start using cash
If you leave all of your credit cards at home, automate your bills and savings, followed by withdrawing all of your remaining funds you literally only have a certain amount to spend.
You can make this even more saving efficient by bringing $20 outside and heading to the super market instead of $100.
This forces you to become creative when shopping and hunt for deals.
Often we are lazy shoppers and do not look for the best shopping deals because it includes more walking.
Do a savings challenge
Save $5 a day
You can save $5 in cash each day if you are in favor of using cash or you can automate $5 into your savings each day.
Just keep in mind that you technically have $35 less each week to spend and this could be swapping out lunch and breakfast one day for meal prep.
It could also look like switching your self-care routine for something more affordable.
Save all your one dollar bills
For this method you will need cash but its a great way to figure out how to save money.
You’d be surprised how many times you will get singles back from a cash register.
Instead of spending them you will save them. There are cute money saving jars you can use on Amazon and make saving money fun.
We can build wealth and enjoy the process. Building healthy financial habits can also be fun if you let it be.
Swap out an activity for savings
If you’re not into the technical parts of budgeting and saving you can simply save the money from a specific activity.
If you get your nails and toes done all year round and it’s winter time you can save the money from your monthly pedicures.
If you treasure car washes invest in a good sponge, learn how to DIY the the wash and then save the money from however often you would have paid someone.
You can do this multiple times a month or even week. Saving $7 counts.
Before you know it you will hit $100 and then $1000 and slowly ease your way away from money trouble and towards wealth and joy. Each time we have a financial win, is another time that we make our future self happy.
Get uncomfortable
Assuming that your jar is not completely empty and you have some more room. Pick up an extra shift at work. Stay back another hour or two. But as you do this begin to think of how you can transform your life and start making more money for yourself.
Or you can feel the discomfort of not having savings a bit longer and dive straight into creation mode. Creation of the life you actually want. If that looks like becoming an influencer start mapping out your content.
If it looks like becoming a ( fill in the blank) and going back to school, how can you start this process?
Although you are not happy with your circumstances part of you accepted that's how life would be until today. You're reading this post to shake up your finances and it's time to do it in a big way.
Conclusion
Saving money from scratch is challenging but not impossible. Keep the focus on yourself and your money goals and watch the money roll in.
Once you start to save money you can focus on keeping the money and moving onto new goals.
Drop a comment and let us know how you plan to start saving money!
And don't forget to check out our FREE resource library for some printer friendly saving templates!
