Top 6 obstacles to saving money and how to overcome them

Saving money is crucial to achieving financial independence. It helps to afford the basic necessities in life, retire comfortably and handle financial difficulties. However, the savings journey is not always a smooth one.

There are endless obstacles that can come your way even if you are very determined in reaching your financial goals. Some obstacles are self-created, like bad money habits, while others are unexpected emergencies we can’t avoid.

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Here are six common obstacles to saving money and how you can overcome them:

Not having a budget
A budget is one of the most important elements for reaching a financial goal. It helps you control your money by serving as a spending guide. Without a budget, you may find it difficult to save, because you’re likely to be putting spending before saving.

How to overcome: There’s only one way you can solve this problem – have a budget! You can start by trying the 50/20/30 budget rule. Set aside 50% of your income for your needs like your monthly debts, bills, food, and mortgage. Allocate 20% to your savings account and 30% to wants such as your movie night outs or hobbies.

Poor debt management
If you can’t handle debt, chances are you’re already swimming in an overwhelming amount of it. This can be a difficult obstacle to overcome because instead of saving money, you are paying debts. Debts also accumulate interest over time which can eat into the savings that you have.

How to overcome: If you have multiple debts, consider using the ‘avalanche’ method of focusing on paying off debts one at a time, starting with the debt with the highest interest rate. Alternatively, you could consider consolidating your debts into one loan for easier management and potentially lower repayments, but this could result in higher interest costs over the long term.

In this consumer-driven world, we are perennially bombarded by ads everywhere we go. It can be tempting to spend money on things that these adverts make us feel we need, even though in reality, we probably don’t.

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Discounts are tempting as well. For instance, say you came across a discounted bluetooth speaker at half its original price from $250 to $125. By buying it, you might think that you are saving $125, but actually, you just spent $125 for a speaker you don’t really need.

How to overcome: Lessen your social media consumption, turn off email notifications from your favourite stores and spend more time on a hobby that isn’t online shopping. This way temptations are reduced, so you can focus on saving money instead. Remember, every little purchase can add up to having a huge impact on your expenses.

Lifestyle inflation
Lifestyle inflation can also be a hurdle to growing your savings. It occurs when your income goes up and you let the costs of your lifestyle go up with it.

For instance, your lifestyle as a student may have been much simpler, getting by with simple meals and an old iPhone. But now that you’re earning a steady income, all of the things you considered to be ‘luxuries’ as a student have seemingly become ‘necessities’.

How to overcome: Lifestyle inflation often goes unnoticed. Identify whether or not you’ve experienced it by going back to the things you were spending on when you had your first job and compare it to today. Cut some of the expenses on things that aren’t necessities.

Lack of financial knowledge
Another obstacle to saving money could be a lack of financial literacy. It’s imperative to enrich your financial knowledge because often parking all your money in a savings account will not be enough.

Learning more about investing and how to manage your finances properly will help to build a good financial position for you and your future.

How to overcome: Educate yourself on how to grow and manage your wealth by engaging a financial advisor or enrolling in a financial literacy course. Alternatively, you can self-teach using the many free resources online.

Bad money discipline
Your bad money discipline may hinder you from saving money. It may be because you can’t commit to saving, you’re not motivated to develop your financial knowledge, or simply because it’s a difficult habit to break.

A lack of determination to improve your finances will have a bad effect that may haunt you later in your retirement. So it’s best to correct these while time is on your side.

How to overcome: Start breaking your bad money habits one step at a time. Try using a budgeting app to help you distinguish what your everyday expenses are like. Small changes like these can go a long way towards helping you overcome your money-saving obstacles.

About the author
Marxa Dillan is a Financial Writer at In her articles, you’re likely to find complex financial topics broken down into everyday language. She aspires to help improve Australians’ financial literacy and provide them with resources on how to build a better financial position to live or retire comfortably.