Macro Moves

Reasons Behind Why People are not Saving Money?

Created on 22 Jun 2020

Wraps up in 5 Min

Read by 12k people

Updated on 26 Aug 2020

HSBC conducted a survey and reported that only one-third of Indians save their income regularly. Without emergency funds or savings, one could be putting themselves at financial risk. Most of them believe in the concept of saving money, but only a few manage to practice it. There may be plenty of excuses for not saving regularly like I don't know where to save, I don't know how to save, I don't have enough money to save, etc.

After paying bills, renting, and making loan payments, there's often not much leftover, but by proper budgeting and planning, one can build a proper plan to save money. Some people struggle for external reasons, such as health issues, student loans, sick parents, and more prevalent causes than we think.

On the other side, there are individuals out there who are utterly irresponsible with their money despite being able to save more. If you neglect savings and an unplanned bill may arise, then it's going to be a problem. 

  1. Don’t have a Budget- Without a proper budget, it will be challenging to know where the money goes month after month, making it difficult to save money. If this is the reason which makes it difficult to save money, then one must prepare a budget. Develop a budget, open a spreadsheet, and list all recurring expenses like rent, food, utilities, mobile bills, and travel expenses. Now factor all the once a year costs such as annual membership fees, insurance premiums, yearly tuition fees, and annual maintenance fees. Finally, compare total monthly spending with the earnings and save remaining. If there's nothing left over for saving, then need to cut back some unnecessary expenses. Thus a budget will make it easier to pinpoint which bill to slash and save money.

  2.  Lack of Financial Knowledge- Another reason that might make it difficult to save money is the lack of financial knowledge. Without the proper understanding of where and how to invest money, you end up investing in low yield funds. So it is essential to have financial education and literacy. The Financial markets have gotten extraordinarily complex, so investors are more confused than ever. There are many commercial products to choose from, making it difficult for investors to make a decision.

    The financial products are divided into many categories based on different features and offers, making it complicated for investors to go through those many funds. Too many people are afraid of messing things up.

    They're so scared of investing and not understanding the financial products. Many of them fear of making a mistake with their savings and breaking out of their comfort zone. Because of all this fear, many often choose to-do nothing approach to save them from making a mistake. 

  3. Huge Amount of Debt- Nowadays, many people accept debt as part of their lifestyle. Most times, people graduate college or enter the workforce and immediately pile on debt that makes it significantly harder to save. By Increases in debt, the amount that goes to service this debt has also increased accordingly. The main problem is that financial institutions such as banks have found liability extremely profitable; hence it has become the most marketed product. Nowadays, credit cards are gaining popularity, which is one of the worst things you can allow in your financial life. Credit cards make ease of spending beyond your means and then charge a high-interest rate that sucks money from your pocket. Thus credit card debt makes saving money a much more difficult task. 

  4. Nature of Overspending- Most people fall victim to overspending. It starts with a government that believes spending drives the economy, and governments have encouraged expenditures for the past few decades, even if it means spending money we do not have.

    If this continues, the saving efforts will continue to get thwarted. We live in a Consumption society rather than a saving society. Drop-in income is one of the usual reasons why people can't save anymore or now not inclined to set saving aside.

    This kind of scenario comes when you lose one of your income streams or a sudden decline in salary due to some economic slowdown. Then you unexpectedly need to cut many expenses, and it would be worse if you have a family and children to take care of. 

  5. Lack of Goals in your Mind- If you don't have a goal in mind of how much to save or what you want to use the money for, it's easy to let other things take priority. Before you take a step forward to protect, you need to know for which you are saving money.

    This will also keep you motivated to save. Some people need to be tricked into saving money because they don't have the willpower to save without a push. If you're one of them, then you need to automate your savings. By setting up automatic savings, you can ensure you meet your savings goals first and force yourself to live on what's left. If you're one of the lucky people who expect an inheritance in the future, then there is reason to believe that you don't need to save for the future.

    If your parents guarantee it and the amount is impressive, you might not work a day for the rest of your life once again. Just like inheritance, there is another reason for not saving money that is rich parents. If your parents are wealthy enough to support you and your family next year, you might not save money for your future. 


There might be many reasons/excuses which make it impossible to save money. But, if you take the time to identify your difficulties in saving money and figure out how to conquer all those obstacles and start saving money, you will become financially stable and achieve your goals early. It's never too late to begin investing. Hence one must develop habits of saving and build a strategy or a budget to save your money and watch your money working for you.

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An Article By -

Ayushi Upadhyay

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A Keen Learner. Tiny, brainy, and studious, this quiet one stays in her zone until she pops. And once she does, boy, are her comebacks snappy! There is no financial question that she can't answer through her magical blog-writing. 

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