You can’t afford to only save money when it’s convenient

Saving money is uncomfortable. Judging by the numbers, that’s never been more true. Consumers in the United States do not save money. We know we need to. We wish we did. We used to. But now we don’t.

No one’s quite sure why that’s the case. Writing for The Atlantic, reporter Derek Thompson suggests five possible reasons why the savings rate for American households has plummeted in the past 30 year, a period that has seen the bottom 90 percent of households go from saving 10 percent of their income to saving -10 percent (yes, negative 10 percent):

• Americans stopped saving because their incomes stopped growing
• The poor and middle class put all of their available money into buying houses (pushing themselves into debt)
• Certain U.S. policies – particularly the ones that allow us to borrow against our retirement funds – make it easy to not save money
• U.S. consumers have a proven penchant for conspicuous consumption; that is, making purchases that reflect a level of wealth we may not necessarily have
• Rising income inequality has spurred a culture of unhealthy spending (i.e. “keeping up with the Joneses”)

All of these theories offer some insight into the economic and cultural factors that have lead us to where we are today. But none of these theories, and none of the verifiable evidence behind these theories, is an adequate excuse.

The importance of adequate savings

It’s true that saving money is difficult for most Americans. But it’s also true that saving money is enormously important to your overall wellness.

According to a survey conducted by the Federal Reserve Board, nearly half of all American consumers (47 percent) do not have the available funds necessary to cover a $400 emergency. $400 isn’t an insignificant amount of money, but as financial setbacks go, it’s on the low end of the spectrum. Without a savings cushion, small emergencies become big emergencies and big emergencies become financially crippling.

This is why you can’t afford to wait for something to change before you start saving money. You may have a million good reasons why you aren’t saving any money right now, but the fact remains that you still need to save money.

Saving within your limitations

Yes, it would be much easier to save money if you had more income. But that doesn’t mean it’s not possible to save money with the income you currently have. It just means you have carve out some space in your current budget for routine savings. Some ideas:

• Direct deposit funds from your paycheck into a savings account.
• Inventory your various monthly expenses for any inessential spending, and then direct those funds into savings instead.
• Subtract one luxury a month (dining out, going to the movies, etc.) and put that money into savings. Switch to a different luxury the next month.
• Sell unwanted or unneeded items and put that money into savings.

Saving money on a limited budget can be painful. It means giving up a lot of things you enjoy. But it’s much less painful in the long run than trying to navigate a sudden emergency with no savings.