When an obstacle in the road appears, this usually means you take a detour or maneuver around it to get back on the right path – even if it means getting stuck in traffic for a while.
Financial roadblocks are sometimes a bit more difficult to navigate. Many times, they can be obstacles you’ve created for yourself, like poor money habits that derail any desire to save money. Worse yet, you might be oblivious to any major money issues to begin with. This means you’re not just stuck in a traffic jam – you’re stalled out on the financial freeway.
The key to overcoming financial obstacles is to first identify them. Once you’ve done this, you can make a plan. To help you out, check out these 5 common money obstacles and see if any of them apply to you.
Obstacle #1: Lack of financial literacy
We tend to think of an obstacle as something that stands in the way of achieving a goal, like saving money. But sometimes, an obstacle can manifest as the absence of something, like a lack of financial knowledge.
Financial literacy can be translated as being knowledgeable about how finances work. Insufficient financial know-how can make it hard to save money, especially when you don’t know where to begin, how much to save, or even what saving money entails, says James R. Nowlin, author of The Purposeful Millionaire.
“You need to be knowledgeable about money management so you can save money,” says Nowlin. “Make sure you at least have a thorough understanding of how credit cards work, how interest rates function, how to set budgets,” he says.
We recommend starting with some of these helpful articles on enhancing your money IQ and how to make better money decisions.
Obstacle #2: Not budgeting
A budget is the bedrock of your personal finances. Without a budget, your money may be standing on shaky ground. Why? A budget helps you see how much money is coming in and going out. And, having a budget in place will help you save money.
“One of the biggest obstacles to saving is the average American’s aversion to creating a budget,” says blogger J.R. Duren. “If you don’t have a budget to guide you, then there’s a good chance you’ll be less conscious of how much money is in your savings account.”
Duren notes that your budget acts as a financial compass to guide you towards monthly money goals. “When you create a budget with a specific section for savings, you can go through the month with that goal in mind, making decisions based on whether or not your purchases will help you meet your savings goal.”
What you budget for – or rather, what you don’t budget for – can quickly become another obstacle to saving money.
“One of the biggest obstacles that I have noticed people have when trying to save is not budgeting for the small expenses,” says LaKesha Womack, a financial literacy author. “Normally, people budget for the big items like their mortgage, car payment, insurance, utilities, etc., but they fail to consider household and personal items. Those expenses can easily eat away at the budget,” says Womack.
“I noticed this in my own budget,” she continued, adding that she gives herself room for miscellaneous expenses. “I am sure to include reasonable amounts for gas and groceries,” says Womack.
In short: build a budget and the savings will come.
Obstacle #3: Too much debt
Any kind of major debt can be financially oppressive, but student loan debt is perhaps the biggest savings killer out there. In fact, the average 2016 college graduate has over $37,000 in student loan debt, a 6% increase from 2015. This often leaves little wiggle room for saving money – even if you have a budget!
“That debt keeps you from putting away the amount of money you desire into your savings,” says Jamie Wharton, a marketing coordinator with lending site Earnest.com. Wharton suggests refinancing your student loans in order to pare down your debt. By refinancing with a lower interest rate, you’ll then free up some money to use toward your savings, she says.
Obstacle #4: Spending needlessly
It’s one thing to be wrought with expenses that make it hard to save, like rent or a car payment. It’s another thing to spend your money on unnecessary purchases.
When spending becomes chronic, you may find there’s no money leftover to save.
“Some people just can’t stand having old stuff, or they get tired of their possessions too quickly. One example is that guy who always buys the newest model of the iPhone, even though his current iPhone is still 100% functional,” says Nowlin of The Purposeful Millionaire.
“Chronic overspending is a habit that you should aim to beat,” he says. “Download one of the numerous ‘spending tracking’ apps to identify exactly where your money goes.”
A couple of apps that may help you out include Mint and the Chime app.
Obstacle #5: Yourself
You can be standing in the way of your own savings goals. It’s true. You may be your own obstacle; your own financial worst enemy.
“You have to avoid being an obstacle to yourself,” says Matt Collins, owner and founder of LoansNow. “For example, paying your bills late can lead to additional fees that may seem small, but can severely restrict your savings ability.”
Another reason you may fail to save money is because you give up on yourself.
“The biggest obstacle I find when it comes to people saving is themselves; that realization and confidence that they can do it,” says Debbi King, personal finance expert and author. “So many people believe that they don’t even have a dollar to save. However, if you are eating out, going to movies, traveling, drinking lattes – you have the money to save,” she says.
King recommends paying yourself first — setting aside a portion of your paycheck before paying any bills or expenses.
“Even if it is just $10, start somewhere,” she says. “Have it directly put into your savings account, and very soon, you won’t even miss it. And if you can’t save, have a hard meeting with yourself about where you can cut back and use that money to pay yourself first.”
There are some ways to help yourself out here. For example, when you open a Chime account, you’ll get a Chime Visa debit card. With each purchase you make on your card, Chime rounds up the dollar amount and saves the change into your Savings account. You can also sign up for automatic savings and this feature deposits 10% of each paycheck into your Savings account.
King says that automating worked for her.
“I thought for many years that I didn’t have the money; that every dollar had to go to other bills,” she says. “But one day, I set up a direct transfer every week for $50. It happened automatically, so I never saw the money. One day, I thought to check my balance and I had $600. It was amazing. So whether it is $10, $50, or $500, pay yourself first…You can do it and more importantly, it is the key to building wealth.”
How to Save Money When Obstacles Keep Getting in the Way
Knowing the obstacles is half the battle; the other half is building a system that saves money almost automatically, so willpower is not the only thing standing between you and a fuller savings account. The most reliable way to save money is to remove the decision from the equation: pay yourself first, automate transfers, and shrink the recurring expenses that quietly drain your budget. When saving happens in the background, the five obstacles above lose most of their power.
Make Saving Automatic
Set up an automatic transfer from checking to savings the day after each payday, even if it starts at ten or twenty dollars. Because the money moves before you can spend it, you adapt your spending to what is left rather than trying to save whatever happens to remain at month-end. Round-up features and dedicated automatic saving apps make this effortless by squirreling away small amounts you will not miss.
Attack the Budget Leaks First
Before cutting the fun stuff, find the silent leaks: forgotten subscriptions, bank fees, and creeping utility costs. Our guide to surprising ways to cut household costs and these creative ways to save money can free up cash without feeling like deprivation. Pair that with a simple plan from our walkthrough on how to budget effectively, and the savings build on their own. You can even pad your balance with legitimate free money offers like bank bonuses and unclaimed funds.
Key Takeaways
- The biggest obstacles to saving money are usually habits and a lack of a system, not income alone.
- Automating transfers and paying yourself first removes willpower from the equation.
- Cutting recurring leaks such as subscriptions and fees often frees more cash than cutting small treats.
- Starting small still works: consistent tiny deposits compound into real savings over time.
Frequently Asked Questions About How to Save Money
What is the easiest way to start saving money?
Automate it. Set a recurring transfer to savings for a small, comfortable amount right after payday so the money is saved before you can spend it. As the habit sticks, gradually raise the amount. Removing the manual decision is what makes saving easy and sustainable.
How much of my income should I save?
A common guideline is to save about twenty percent of your take-home pay, often framed as the 50/30/20 rule, with half for needs, thirty percent for wants, and twenty percent for savings and debt payoff. If that is out of reach today, start with any percentage you can and increase it over time. Free resources from America Saves can help you set a realistic goal.
How do I save money when I live paycheck to paycheck?
Focus first on plugging budget leaks and building a small starter emergency fund, even a few hundred dollars, so unexpected costs do not push you toward debt. Track where your money goes, cancel what you do not use, and automate a tiny transfer so progress happens without effort. The Consumer Financial Protection Bureau offers free budgeting tools designed for tight budgets.
