If you’re having trouble reaching your financial goals, you aren’t alone. 70% of Americans have less than $1,000 stashed in the bank – and 21% of Americans aren’t saving any additional money, while an additional 48% are saving 5-10% of their income. Those are staggering numbers.
There are a number of different reasons that it’s hard to meet your financial goals – and in this article, we’ll take a look at a few of the most common reasons why Americans are failing to save money and build a better financial future.
Why Most Americans Are Not Meeting Their Financial Goals?
1. Lack of Any Financial Goals
You can’t accomplish a goal if you don’t have one, so one of the biggest reasons that Americans fail to meet their financial goals is that they don’t have a goal.
In some cases, this can be because high debt burdens and monthly expenses prevent them from saving money, and they need to focus on covering monthly expenses. But in other cases, it’s simply because they haven’t taken the time to think about what they really want from their financial future – and how to successfully get there.
So, one of the first steps you should take is to create a goal for yourself. Whether it’s paying off a car loan, personal loan, or auto title loans, buying a house, saving more for retirement, or any other such goal, knowing what your objective is can help guide you as you save money in the long term.
2. Failing to Create A Budget or Track Spending
We can call this “I’ll get around to it” syndrome that most of the Americans are struck with. Particularly among younger people, there’s the idea that sitting down and taking the time to create a household budget and track spending isn’t that important – and that they’ll get to it someday!
But in fact, creating a household budget and tracking spending is the single most important thing that you can do. Creating a budget lets you see where your money is going – and cut unnecessary expenses to help you meet your financial goals.
Whether you want to pay down debt, save for higher education, save for retirement, purchase a home, or meet any other financial goal, having a budget can help meet that goal successfully. Despite this, around 51% of people have no budget at all.
3. High Debt Burdens
Americans have more debt than ever. On average, each American household has about $8,400 in credit card debt. Expanding this definition to include all types of consumer debt – including student loans, personal loans, and auto loans – paints an even more frightening picture. The average household has $38,000 in personal debt.
Student loan debt, in particular, is a big barrier to saving money and meeting financial goals. About 69% of college students take out loans to go to school, and graduate with an average of $29,900 in private and public loans.
Paying down debt is more important than you might think, for meeting your financial goals. The sooner you can pay down the debt, the less money you will pay in interest – which results in more money that can be spent paying down debts or saving for the future.
4. High Monthly Expenses
About 38% of Americans cite “high monthly expenses” as the number one reason that they are not able to save money and meet their financial goals. In addition, 38% of people also said that their top financial priority with the last few months was “staying or getting current on bills.”
More people than ever are living with high monthly expenses, and this makes sense. It’s been estimated that middle class life is about 30% more expensive today than it was in the year 2000. The cost of going to college has more than doubled, and housing prices in many areas have tripled or even quadrupled – particularly in popular urban areas.
This is why it’s important to try to live below your means whenever possible. By doing things like purchasing the right home for your family, buying used cars, cooking at home instead of going out to eat, and saving on vacations, you can cut down on your monthly bills and debt payments significantly – and save more money to reach your financial goals.
Know the Most Common Obstacles That Stop You from Saving Money!
Hopefully, this guide has helped you learn a little bit more about the most common obstacles that stop individuals from reaching their savings goals, and the effective strategies you can use to overcome these obstacles and achieve financial independence. Remember that saving money and reaching your goals does not happen overnight. It is a long-term process – but the best time to start is always now!