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14 Reasons Why It's So Hard to Save Money Today

By Anna Davies. September 28, 2024 · 11 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right.

14 Reasons Why It's So Hard to Save Money Today

There are many factors that make it hard to save money today, from the high price of groceries to the high interest rates on credit cards. Inflation. If you’re feeling a pinch, you’re not alone. It’s difficult to afford daily expenses and to save for financial goals, like having an emergency fund.

When it comes to covering a $400 unexpected expense, 37% of adults said they would have to borrow, sell something or not be able to cover the expense, according to a 2023 survey from the Federal Reserve. And emergencies can be more expensive than that $400 figure.

Beyond emergency funds, saving for other goals, like the down payment on a house or one’s retirement, are also feeling as if they are hard to achieve. These are worthwhile goals that build wealth. But how do you begin saving when everything is so expensive?

Read on to learn 14 reasons why you’re likely having trouble saving money, plus tips for how to start stashing away more cash.

Key Points

•   High inflation and rising costs for essentials groceries make saving more challenging.

•   Many adults struggle to cover unexpected expenses without resorting to credit.

•   Debt, especially from high-interest credit cards, significantly hinders the ability to save.

•   Lack of budgeting contributes to poor financial management and savings shortfalls.

•   Social pressures and lifestyle inflation can lead to increased spending, further impeding savings efforts.

Challenges of Saving Money in Today’s Economy

Here are some of the most common reasons why you may find it hard to save money.

1. Not Focusing on Paying Down Debt

Having debt is one of the reasons many people have difficulty saving money. The urge to pay it off vs. save is strong. That’s especially true if you’re carrying revolving debt, like debt from credit cards. Interest rates on these types of accounts can change, which may mean that you’re owing even more money in interest than you may have thought. Right now, the range of interest rates on credit cards is around 13% to 27%.

American household debt hit a record high of $17.69 trillion in early 2024, according to the Federal Reserve. This debt includes student loan debt, credit card debt, mortgage debt, and personal loan debt. Some of this debt can be low-interest, like many mortgages, which also help a person build equity.

The kind of debt that typically prevents a person from saving is high-interest credit card debt. Paying that down by consolidating debt with a low- or no-interest card or by taking out a lower-interest personal loan can be good solutions.

2. Budgeting is a Non-Factor

Budgeting can sound intimidating, but assigning a dollar to all aspects of your cash flow can ensure that you don’t lose track of money. Recently, the average household earned $74,580 before taxes, according to U.S. Census data. Of that money, necessary expenditures — housing, food, health insurance — ate up the majority of the money, leaving little in free cash flow.

This “free cash flow” isn’t free, of course. It’s money to be put toward paying down debt, building an emergency fund, as well as paying for extras, like vacations and nights out. Knowing exactly how much you have and tracking your spending can help you put some money into savings. Try one of the popular budgets, like the envelope system or the 50/30/20 rule (which has you put 50% of after-tax money toward needs, 30% toward wants, and 20% toward saving), to take control of your cash.

3. Trying to Impress Friends With Money

Maybe friends invite you to a pricier-than-expected restaurant and you go along, only to split the painfully expensive check. That’s an example of FOMO (Fear of Missing Out) spending, which is an update on “Keeping up with the Joneses). Or perhaps you get a bonus and blow it on a status wristwatch to feel as if you fit in with your big-spender pals.

If you feel like you’re always spending money with friends, consider ways to potentially minimize that outflow of cash. Hikes, potlucks, and checking out local events can all be ways to cut down on these costs. They are relatively easy ways to save money. Or you might go back to that budget you created (see #1) and make sure you stick to it when it comes to splurge-y spending.

4. Not Earning Enough Money

It’s important that the money you earn be able to cover all your expenses. And sometimes, when your expenses increase unexpectedly, your paycheck doesn’t stretch as far as you need. Making and sticking to a budget can help you understand how much you’re spending each month, and can clue you into increases.

For example, say your rent renews 10% above what you were paying last year or your auto insurance increases. That money needs to come from somewhere. You might consider the benefits of a side hustle. Maybe you can sell the jewelry you make on Etsy, get a weekend job at a nearby cafe, or drive a ride-share from time to time.

5. Not Having an Emergency Fund

Saving for emergencies is important for many reasons, one of which is to have an emergency fund. An emergency fund is what it sounds like: Cash that can cover an emergency, which can be anything from a blown tire to a trip to the vet to covering expenses if you were unexpectedly let go from your job. Having an emergency fund relatively liquid and easy to access in a high-yield savings account (rather than in investments) means you can tap into it relatively quickly if you were to need it.

Most financial experts advise having three to six months’ worth of basic living expenses in an emergency fund. Set up regular transfers from your checking account to fund that; even $25 a week or a month is a start. Consider putting a windfall, like a tax refund, there as well.

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6. Shopping Too Much

Shopping too much doesn’t mean always filling your online cart or always having packages at the doorstep. It could just mean that you’re not being strategic about how much you’re paying. For example, buying groceries every day at a nearby gourmet grocery could be much more expensive over time than doing a weekly or bi-weekly shopping trip to a warehouse club.

Making lists, tracking items over time, and making sure you get the best price by using coupons and cash back offers are all ways that can help you save money and even have fun while doing so.

7. Inflation in Housing, Education and More

Sky-high housing prices. Rising tuition costs. And interest rates that are increasing. Inflation can make everything more expensive. This can make it challenging to figure out how much to save, especially if you’re saving for a house or putting aside money for tuition. Inflation can also make smaller things, like grocery runs, more expensive too. Overall, rising prices can make it feel difficult to save money, let alone keep your checking account where you want it to be.

Take a deep breath and remind yourself of the cyclical nature of the economy. America has had recessions, a Great Depression, and plenty of inflation before. Persevere and be money motivated: Do your best to control spending and save, if possible, 10% of your take-home earnings towards your future goals.

8. Paying for Items We Don’t Use

How much stuff do you own? Probably way more than you regularly use. And it’s not only physical stuff. Unused digital subscriptions and wasted food…all of it adds up to spending money on things we don’t need.

One quick way to get that money back: Go through your last month of bank account payments and note any money you spent on subscriptions. Chances are, there are at least one or two you either don’t use or use so rarely you can let them go without missing them. For instance, check out how many streaming channels you are paying for. It could save you hundreds of dollars a year if you lose one or two.

9. Saving Money is Not Our Priority

If you wait until the end of the month to put aside whatever you have left, chances are there’s no money left. That’s why prioritizing saving is so important. Learning to save can be a skill, and employing smart strategies can help you make sure that you keep that skill strong.

For example, you can automatically transfer money from your paycheck into savings, so you don’t see it sitting there and aren’t tempted to spend it. Budgeting apps can also be helpful to curb spending so you have more money to save.

10. Cost of Living is Rising

We’ve touched on inflation hitting the large things we’re saving for, and the small things we buy every day. Inflation is notable across so many spending categories: The World Economic Forum found that food prices increased worldwide by nearly 10% from January to April 2022 — the largest 12-month rise since 1982. This past year, they rose just 1%, but rising less swiftly of course is very different from seeing costs move lower.

There are various ways to manage this. One way to get a quick cash infusion is to sell things you have but no longer need or use. This might be gently used clothing, a laptop that’s sitting unused, or that mountain bike that is gathering dust. You can try a garage sale, Nextdoor, Craigslist, or local Facebook groups, or (if it’s something small) eBay or Etsy.

11. Spending Too Money On Social Activities

All too often, hanging out comes with a price tag. After dinner, or a show, or drinks you’ve depleted your bank account. Setting up a budget for socializing can help you spend money wisely. You might check out the restaurant in your neighborhood you’ve been dying to try when they have a reasonably priced prix fixe menu; that way, you’d still have space to save. Thinking of cheap activities and researching free things going on in your community (music, fairs, and more) can help you go out without the steep price tag.

12. Lifestyle Creep

If you’re not familiar with the expression, lifestyle creep is when increased income leads to increased spending. As your pay goes up, you may feel justified in moving up to a rental home with more amenities. You may be more likely to go to more expensive hotels when traveling and join pricey gyms. Lifestyle creep can make it tough to pay down debt, boost savings, and build wealth.

Upgrading your leisure habits when you make more money isn’t a bad thing — but it can be something to be conscious of, especially if you feel like you aren’t saving enough. This may be a good moment to pick and choose your perks. If you are moving to a more expensive apartment, say, maybe you skip that quick vacation you were thinking of taking. Or you could come up with fun ways to save money, like monthly challenges. For instance, don’t buy any fancy lattes for a month and put the money in savings. You may be surprised by how much you save.

13. Not Thinking Ahead

One big reason it’s so hard to save money is that we are so rooted in the present. It’s a real challenge to imagine our toddler needing college tuition money or ourselves being old enough to retire. It can be easier just to put those thoughts to one side for a while.

But when that happens, the opportunity for compound interest is lost. For instance, if Person A were to save $1,000 a month from age 25 to 65, accruing 6% interest, they would have more than $2+ million in the bank at age 65. If Person B saved the same $1,000 a month from age 35 onward until they turned 65, they would have about $1,000,000, or half as much!

By budgeting, planning ahead, and saving, you can have financial discipline and enjoy these kinds of results. It’s important to remind yourself to take care of tomorrow as well as today.

14. Spending Money is Easy

Whether you’re out and about or scrolling through your phone, opportunities to spend money are everywhere. You see a delicious poke bowl while running errands, or you’re looking at your friend’s baby on Instagram, and there are those vitamins everyone is talking about. Ka-ching.

It’s definitely a challenge to grow your money mindset and be able to ignore all of these temptations and focus on longer-term financial goals. Namely, saving for “out of sight, out of mind” future needs. Here’s where your budget can once again be helpful. By having a small stash of cash for fun, on-the-fly expenditures, you can treat yourself (something we all need now and then) without blowing your budget. You will likely be a more mindful and careful consumer if you know, say, that you have $25 this week for a reward.

The Takeaway

Yes, it can be hard to save money due to rising costs, high interest rates, FOMO, lifestyle creep, and other forces. But if you focus on saving money, you’ll find more and more ways to maximize the money you do have. One of the ways to do so is to look for a banking partner with low (or no) fees and high interest rates.

Take a look at what SoFi offers.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.20% APY on SoFi Checking and Savings.

FAQ

What are the challenges of saving money?

An increased cost of living, lack of a budget, and other factors can make it hard to save. Add in temptations to spend, social pressure, and the fact that a purchase can momentarily lift your spirits, and you have plenty of reasons why saving can be challenging. The good news: A few behavioral tweaks (such as finding a budget you can really follow) can help you save money and make the most of every dollar.

Do millionaires struggle to save money?

Yes. Studies and surveys have found that even high earners live paycheck to paycheck. Fortunately, there are always ways to save, regardless of the size of your bank account. The same rules of budgeting, setting up automatic transfers into savings, and being a smart consumer can help anyone.

How do you stay motivated when it’s so hard to save money?

Motivation varies. Some people find it motivating to see their credit card balance go down, other people like to see their retirement account balance grow, and still others like to mix it up and give themselves a different saving challenge each month. The trick is finding a strategy that works for you.


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As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.20% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/31/2024. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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