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Money Psychology: Why Is it So Hard to Save Money?
Money Psychology

Money Psychology: Why Is it So Hard to Save Money?

Pay yourself first, save for a rainy day, build an emergency fund, save to invest etc. the idea of saving money as a means to building financial security is not alien to anyone. 

The practice of saving consistently and putting the money in the right place, can help one avoid predatory debt, expensive loans which can relieve stress. And this is, actually, backed by science.

According to a study on financial anxiety, by the centre for social development, financial anxiety and stress may increase the risk of experiencing other mental health symptoms, negatively impact parental quality, and negatively impact children's development and academic outcomes.

Despite the advantages of saving money being generally well known in the population, few people save consistently and even fewer people save a significant percentage of their income.

A 2021 report shows the savings rate for Kenya at 12%, which is lower than the 17% average for other African countries. Neighbours Uganda and Tanzania have much higher savings rates than Kenya notwithstanding their considerably lower per capita income.

Saving money can be difficult, and it is not unique to a specific group of people. This 2018 report from ME Bank shows that 25% of households in Australia, for instance, struggle with cash savings while 17% do not always pay their bills on time due to a lack of money.

 Why is it So Hard to Save?

Inability, fear or unwillingness to track expenses

For someone whose spending is out of control, the most difficult place to begin is tracking how they spend their money. This may be because of fear, inability or unwillingness to track expenses since one may not be ready to confront the reality of their financial situation.

Read Also: How Financial Denial is Making You Poor – Money Psychology

Do not save what is left after spending, but spend what is left after saving, this quote attributed to Warren Buffett is a good rule of thumb to nudge someone struggling with saving due to overspending. 

Then the Swedish proverb - He who buys what he does not need, steals from himself - acts as a warning against unplanned spending which is really the reason someone ends up spending more than they need to and become lethargic when confronted with the prospect of analysing their expenditure. 

Tip: The most natural place to begin is creating a budget - the backbone of your finances. But do not just stop at that. To operationalise the budget, you need to create a tracking mechanism, it could be a mobile app expense tracker, a spreadsheet or plain pen and paper. But first, do a full financial self-audit.

There’s just not enough to save

In life, there are times when we simply do not make enough which limits our saving capabilities. This is fine and it won't last long if you do not let it.

Tip: Consider making some sacrifices and slashing unnecessary costs if you find yourself in this situation. Saving even as little as Ksh1,000 per month will begin to shift your thinking about money management. Begin with a small goal in mind and then grow it as you advance.

Also, you may want to think about starting a side-hustle to earn some extra money.

Also Read: 8 Ideas to Create Multiple Sources of Income

I don’t ca-re!

With this attitude, it is hard to save money. Many people may entertain the idea that their incomes are fully protected -  that they will eventually never grow old and be unable to work, lose that job or be in a position that will not allow them to have money. The biggest explanation for this is the YOLO attitude. Yes, "You Only Live Once," but if your financial situation deteriorates, will that still be living in the future?

Tip: First, consider the possibility of losing your main source of income today - how would that affect your life? Next, what financial goals do you have? Are they achievable without savings, without an investment fund and emergency savings? If you were to fall sick and be unable to work, would you still be able to YOLO?

There is no future

There are individuals who believe in living in the moment and the idea of saving for the future is not appealing to them. While there are no guarantees on how long you will live, or any accurate way of predicting this, even a short period as one year can have life-changing financial events. 

The most obvious example of how the concept of ‘future’ is very real and consequential is the Covid-19 pandemic. In Kenya alone, over two million people lost their sources of livelihood in a few short months - without savings, recovery has been an uphill task for many.

Tip: Prepare to live to the oldest age you can envision. And, since it is almost impossible to work for one’s whole life, consider having enough money saved up just in case the future gets you here.

Read Also: Saving For Beginners: Follow the 50/30/20 Rule

Keeping Up With the Joneses

The world we live in is very competitive and in trying to keep up with those in our circles, neighbours or those we went to school with, we may get caught up in unplanned spending.

Since we care about the friends we keep, the neighbourhoods we live in and the schools that our children go to, it then becomes apparent that we can't all afford the same things - especially when we don’t know the sources of income for those we are keeping up with.

By bloating our expenditure to keep up with societal expectations or create an illusion of success, our ability to save is severely hurt. 

Tip: The best way to achieve the lifestyle you desire is to measure your progress against yourself - and by yourself, we mean your financial goals. Have short-, medium-, and long-term goals. If you are able to set this roadmap for yourself, any money you earn is already planned for - you know where it needs to go. This is as opposed to following the bandwagon of societal expectations and trying to keep up appearances. If your income rises, consider not increasing your spending but put away the extra money you earn. 

Read Also: Money Mastery: How to Set & Actually Achieve Your Financial Goal

I Don’t Know How to Save

It is okay to not know everything. The beginning of change is the acknowledgement of that which we do not know - coupled up with the desire to educate ourselves.  

Ignorance, people say, is bliss but there is no way ignoring your financial situation will solve it.

Tip: Consider starting small by saving the least amount of money you can possibly save and make sure it is automatically being deducted from your income. If you earn Ksh30,000, you can start saving Ksh5,000 through a direct deduction to a savings account for 6 months and see how that works. Then work your way upwards as you continually educate yourself on saving vehicles and how to grow what you are saving. Better yet, join a savings challenge. 

Read Also: 8 Money-Saving Challenges for 2022 - Try at Least One

Is there a psychological explanation on why it’s difficult to save?

We think about our future selves the same way we think about complete strangers, according to science.

When we think about ourselves, the part of the brain known as the medial prefrontal cortex (MPFC) lights up but everything slows down in this region when considering other people. In addition, our brains do not get as pumped up when we're reminded of someone with whom we have nothing in common.

According to functional magnetic resonance imaging (fMRI) studies that measure and map brain activities, the less activation we show in our MPFC the further out in time we try to imagine our own lives.

In other words, our minds behave as if our future selves are people we don't know well and don't particularly care about.

According to Emily Pronin, a psychologist at Princeton University, when thinking about ourselves, we can experience our own thoughts and feelings, whereas when thinking about someone else, we cannot.

She adds, “When it comes to our future selves, we can't experience their feelings the same way we can with our present selves, so they're not really like us at all.”


Even though psychologically we are predisposed to not care much about our future selves, starting to save, even though it is the most difficult part, will eventually become second nature once you get it going.

It's satisfying to see your bank account balance grow, and it gives you a renewed sense of urgency to get things done.

You'll feel more in control of your life, have more self-confidence and be able to take advantage of new opportunities when you start.

To accumulate wealth through saving, and eventually investing those savings, patience is required. Maintaining financial discipline is not always easy - so go easy on yourself when you breach your own targets.

As different as each individual is, the same applies to our personal finances. Everyone has a unique approach that works best for them. It doesn't matter how you choose to save your money as long as it works for you and remains your top priority.

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Njenga has over 8 years experience in multimedia and business journalism both as a writer, editor and producer. He has over 5 years of experience in radio broadcasting as a news reader, reporter and presenter. He is also a 2012 Earth Journalism Network-EJN Fellow.

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