5 Reasons You Never Have Enough Money
15th December 2021
Somehow, no matter how much you try to avoid it, there’s always those months where we don’t have quite enough money. Whether that’s covering essentials like rent, bills and food, or not being able to meet your savings goals, you can be technically making more than enough money from income, but still fall short at the end of the month. Here are 5 common reasons people struggle to make their income be enough, along with some handy solutions to change that.
1. You’re spending more than you earn
Imagine you make £40,000 a year but you spend £60,000 - those numbers don’t add up, do they? Even though many people are aware of their annual wages, they still decide to spend more money than their disposable income allows. Whether the money is being spent on frivolous shopping hauls or keeping up with your social life, these spending sprees can lead to debt that you didn’t even realise you had.
The most obvious solution is to decrease and cut back on how much you are spending. Alas, it is not always that easy, but in the long run, you’ll thank yourself for it. When your monthly wage hits your bank account, instead of thinking about what you’re going to buy or where you’re going to go, why not challenge yourself and keep the money exactly where it is? The more you do this, the easier it gets - trust us. We have plenty of ideas on how to save money on our blog.
There are a variety of ways you can decrease the amount you spend, including setting no-spend days, shopping with a list, switching to cash only, cancelling subscriptions, budgeting, planning free activities - the list is endless. Whichever options suits your lifestyle the most, take action and you’ll notice that you actually have more money than you thought.
2. You aren’t saving
When you’re in the moment and enjoying life, saving money may not always be on your list of priorities. Whilst we’re all here for having fun and making memories, there is definitely a fine line between spending a healthy amount on experiences and going plain overboard. Saving money is not a boring thing to do, and it actually allows you to think about what you want to spend your hard-earned cash on now and in the future and whether it is worth it.
Sit down one evening and really look at your finances. Look at how much you’re earning, how much you’ll need for generic outgoings, and how much you realistically need to keep in your disposable income account. If you can admit that you’re probably overspending and can live without that new jacket or going out for dinner twice a week, pop the money in your savings, instead.
You don’t have to start big either. If the thought of putting away loads of money each month scares you, do it little by little. Then, start to increase the number you save until you’re comfortable with the amount. You could even try Kakeibo, the Japanese art of saving.
3. You’re not tracking your spending
We’re all guilty of ignoring our bank accounts after a hectic weekend of spending. It’s very common for people to avoid checking their online banking app, but that doesn’t mean that it should become accepted as not monitoring your bank account could get you into some serious financial trouble when you least need it.
Set yourself a reminder to check your bank account on a regular basis, whether that be a recurring alarm, a note on your calendar, a voice note, or a post-it note. Whatever works best for you - just do it.
Getting into the habit of checking your balance around three times a week helps you to manage your finances easily and stay on top of how much you’re spending, when you can afford to spend, and when you should curb it. You’ll also always know roundabout how much you have in your bank account which can really help you make wiser decisions when you’re ordering drinks for five random people you just met at the bar.
4. You don’t have financial goals
In the UK, 39% of adults (a staggering 20.3 million) don’t feel confident when it comes to managing their money. A jaw-dropping 11.5 Brits have less than £100 in savings. Whilst there are many reasons for adults not being secure with their money, or not being able to save, not giving enough time and energy to your financial goals is what can send you on a downward spiral.
Everyone has different financial goals and everyone is at a different stage when it comes to money. The first thing to do when setting those goals is to decide where you are at in your life and what you want in the future.
For example, do you want to put a deposit down on a house in the next 5 years? Do you want to pay a big chunk of your student loan off? Do you want to start your own business? Or, do you want to save up for your dream holiday or take some time off work?
Whatever your life plan is, work out how much money you’ll need to achieve it and how long it will take you. This timeline will provide you with the motivation and drive to save up for the amount you need.
5. Cut unnecessary costs
Everyone is guilty of trivial spending when the mood takes you. From morning coffees on the way to the office to ready meals on the way home from work, there are so many small unnecessary costs that add up month by month - did you know daily takeout coffees cost Brits £1,007 a year?
Why not sit down and check your outgoings and calculate how much money you’ve spent the past month on things you don’t really need? Once you’ve worked this out, set yourself a challenge to not spend this exact amount. Instead, at the end of the month, transfer this extra cash into your rainy day fund.
You’ll be surprised at how these little costs add up, and you’ll be surprised how much extra you can save for when you really need it.
6. You’re not budgeting
If you’re someone who still spends heaps of money even though you know you can’t afford it, you need a budget. Whilst there are some periods during the year that are more expensive than others, especially during Christmas and New Year, continually budgeting your expenditure is the key to financial stability month to month.
Start budgeting. It’s easier than ever, especially thanks to the world of budgeting apps (these are our favourites), but, if you want a more hands on approach, a good old Excel spreadsheet will work wonders. Tip: create or buy an aesthetically pleasing budget template - it’ll motivate you to keep coming back to it. You can read more about budgeting and our top tips here.
Life is full of uncertain twists and turns, but, if you’re careful with your money and look after your finances well, you’ll be able to live a life with less stress and more vitality. Envision a life where your money works for you, not the other way around, and you have a goal to strive for.