WHY CAN’T I SAVE ANY MONEY?

Welcome back to my blog. It has been almost four months since I posted my last blog. If you didn’t know, I moved to a new city, purchased a brand new home, started a new job in September of the last year 2019, and just recently finished my first class in my MBA program. Yes, life can get crazy, but I still love to get back to what I love to do most.

So today, we are going to discuss one of the biggest questions in personal finance: Why saving money is so difficult? Majority of the U.S. workers up to 78% are living paycheck to paycheck. Sad but the truth. Within the last two month, I fail into the same finance trap. All the money I made go straight to bills, mortgages and credit cards. Not every one situations are the same so let’s discuss the top 3 reasons why most people are having a difficult time putting money away.

Having No Budget

What is a budget? A budget is a financial plan a person create to save money. A successful budget requires a throughout understanding of income versus all expenses plus a whole lot of disciplines and patience. A fail budget is spending more then what you make. What I am currently doing is having a monthly MUST-SPEND list that I look at frequently. Fix spending like mortgages, car and cell phone payments are a few examples on my MUST-SPEND list.

In a situation where you are spending more then what you earn, look at the list and identify the problem child—for example, cutting down $100 a month of everyday Starbucks purchases by brewing your coffee at home. If you don’t know how to get started with budgeting, my blog post “5 EASIEST WAYS TO TRACK YOUR BUDGET” can be helpful.  

Compulsive Buying

Gotta love the two days Prime shipping. One of the reasons online retailers such as Amazon became so successful because they make it so easy for consumers to get what they want in a short amount of time. 13-days wait for shipping is no longer exist. You can wear your new piece of jewelry, putting on a new shirt, or grill meat on a new BBQ set all within 24 hours after clicking the purchase button. We are all hooked to the point where we aren’t fear or aware of any consequences.

About 6% of the U.S. population can be said to have compulsive buying behavior with 80% of compulsive buyers being women. The most fascinating thing is that spending addictions mostly develop in the 30s when people achieve financial independence. I am 33 and I indeed experienced it.    

Lying To Your Self

I think the best way to describe this is to give you an example: A a full-time McDonald employee decided to purchase a $500 Gucci belt for a Saturday night out. Let’s face it: it was not the best financial decision ever. The Gucci belt might look nice for a flash moment, but its value degraded as soon as it got off the shelves. He probably thinks that this week paycheck would pay off the credit card bill and everything will be alright. Unfortunately, he suddenly got sick a couple days later and had to spend $150 at the urgent care. I used this example because I was in the same shoe with this employee. I told myself every thing will be ok even though in reality it was not. Such an illusion put me in a deeper hole of a personal financial crisis.

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