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What To Do If You Haven’t Been Able To Save Money For A While

Lindsay Tigar  |  February 10, 2022

Nope, it’s not too late In fact, it’s time to forgive yourself and move on. With these moves, you can do this in 2022. We promise.

If you feel like you blinked and the “pandemic years” passed you by — along with, ahem, your savings account — you’re not alone. With growing inflation, supply chain woes that have made things more expensive, lost jobs, and many other negative financial factors, many Americans have felt for the last two years as if they’re constantly playing catch-up. And when it’s been a while since you were able to save money, you can start to feel insecure about your habits and decisions, and question what to do next, says Jessica Weaver, CFP, CDFA, CFS, and the author of ‘Confessions Of a Money Queen.’ “At this moment in your life, every dollar counts, and building an efficient money savings plan is key,” she says. “To be efficient with your money, you need to be strategic with your taxes, how you invest and optimize current money, and create new, consistent habits with your cash flow.” 

But never fear — we’re here to help you figure out where you went astray, and how to get back on track. Remember, this happens to nearly everyone, so try not to be too hard on yourself. You can make improvements in your savings aspirations, even after a tough year. Here’s how:

Revisit your budget 

We’ve said it before (and we’ll say it again) but the first step of any financial plan is creating a budget. It’s one of those fundamentals for money management that can’t be ignored. After a year of not saving any money, whether it be from a job loss or another personal reason, it’s critical to take a look at what you’re earning, what you’re spending, and build in some room for savings, says Danielle Holden, the family office advisor for Breakaway Bookkeeping and Advising. As you map out how much you’ll allocate to different buckets, be honest about where you tend to spend. If Netflix brings you joy, don’t automatically assume you need to cut it out to save money. Instead, think about other expenses that could be reduced without much change to your lifestyle.

Speaking of those expenses… 

It’s time to track them. If you look at each month’s statement and wonder how you spent so much so quickly, you likely don’t have a clear view of your expenses. Even if you’re not someone who enjoys going line-by-line on bank statements, try adopting this practice to improve your financial literacy. Holden suggests printing out your bank and credit card statements and going through each expense and rate as a ‘need,’ ‘want,’ or ‘wish.’ 

Then, you can tackle each of these lists to find cost savings. With the ‘needs’, can you find a cheaper alternative such as cable and internet, shop around, negotiate with your current company? “To give yourself a jumpstart on saving money after a year or few years of not saving anything or saving very little, every dollar counts,” Holden says. “You will also need to track your time to set aside some time every week to move money into your savings, investment, or retirement account.”

In part, this is a big step of being money mindful. It’s essential to take a close hard look at what you’re spending and how it’s tied to emotions. Another way to practice this is to delay satisfaction with fast, quick and easy online shopping. “Give yourself a few days to think about making a larger non-essential purchase, and after those few days, you might be happy you didn’t impulsively buy it,” she adds.

Automate your savings 

Holden says the easiest, most hands-off way to get your savings back on track is to automate bank transfers into a savings account. “Most banks offer this service, and you can choose when, how much, and to where you want to transfer this money to help with your short-term and long-term goals,” she says. “This ‘out of sight out of mind’ method can work well for people who struggle with willpower when it comes to saving vs. spending.”

There’s no “golden percentage” you should be setting aside, since it entirely depends on your current situation and comfort level — and your future goals. If you feel like your budget is tight, try to start at 1% of your monthly earnings, and increase as you feel more confident in your budget. 

Climb the debt mountain

Everyone goes through a year without saving for different reasons. Maybe you were laid off from your job, and you’ve struggled to find a new one. Or, you bought a house, so your savings took a hit. Maybe you have leftover credit card or student loan debt that gives you no wiggle room. As best as you can, Weaver says to figure out a strategy for tackling these mountains. One option is to move credit card balances to 0%-cards. However, Weaver says there is often a transfer fee associated, so you might pay interest on the balance of the transaction. “Do the money math and see if the current interest you are paying is more than the one-time transaction interest,” she says.

You can also refinance your mortgage to a lower rate, or extend your mortgage if need be. And with student loans, see if you can consolidate to a lower rate or refinance them.

Be tax efficient 

What does this mean, exactly? It can mean many things, such as utilizing deductions, retirement plan funding, which can save you money up front, or even meeting with an advisor or accountant who can talk to you about all the various tax strategies that may be available to you. “As you prioritize saving money again, work with a financial advisor to open the proper retirement account to maximize your current savings, lower your overall taxes, and begin setting aside for your future,” she says.


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