“Saving Money Is Impossible”

*This post may contain affiliate links, please see my disclosure

My recent post seemed to be a hit with the financial bloggers, but not so with people in the real world. I got a few responses showing me how it is ridiculous to consider saving half my income, and heck, I would tend to agree with some of them. I am not currently saving 50% of my income, so who am I to say EVERYONE should be doing this?

But just because I am not there yet does not mean I shouldn’t keep my sights fixed on the prize. I look at all financial issues as a challenge to be solved, and like any good engineer, I work to put the pieces together to build the impossible.

I received a direct email in response to the post, and I wanted to share it here to show how even a seemingly impossible situation has hope and a bright light at the end of the tunnel.

Reader email in response to THIS POST:

Not possible. So, not possible.

My Response:

Why do you say this isn’t possible? Tommy made it work, and several people in the comments are saving even more?
What is preventing you from getting there?

Reader response:

total take home pay $2462
Family of 4 (2 a, 2 k)
Rent: $1164 (+ 10.50 for insurance)
electric $274 (Jan)
water $80 (Jan )
car insurance $108
food $600-$700 (gf diet)
gas $160-$200
phones $86
and a bunch of other stuff (unexpected expenses, birthdays, auto repair, medical, etc)

Poverty is preventing me from getting there.

Thanks for sending your details. I know it’s tough, as my family is not even close to the 50% mark either. And the post wasn’t written to discourage those in tough spots financially, but to encourage and motivate them toward a BIG goals.

Your current budget below does definitely have more expenses than income, which is a hard place to be. On first glance, here are my quick suggestions to get above water:

Rent: Unless you’re in a VERY high cost of living area, this can be lowered. My wife and I paid $860/month for a 1000+ sq. ft. 2-bedroom apt. in a high-cost of living area (Redmond, WA). I would shoot for $900 or less if possible. Savings: $250+ per month

Electric: Assuming this is your heat sources as well, I suggest reading  THIS POST and work on getting that down to a lower level. Savings: Up to $150 per month

Car Insurance: Call Geico. 15 minutes could save you 15% or more. My wife and I don’t have them, but call them anyway. We pay $80 per month for 2 cars. Savings: $28 per month.

Food: Even on GF, more strict meal planning can get you closer to $500-$550. This may take some effort, but is required as you don’t have much room in the budget as it is. I suggest checking out eMeals if you want to save a few hours a month of meal planning. And check out how we use it in THIS POST. Savings: $100 per month

Gas: Now, I won’t hit this one too hard, but if you have two commuting cars, I would suggest looking at alternate forms of transportation (Carpool, bus, bike, etc). I know this is a tough one, but just keep an open mind about changing your commuting habits. Savings: $50 per month

Phone: Assuming this is 2 phones, I suggest making the switch to Republic Wireless $10 per line plan. In the short term, there is an up-front cost to get the phones, but you can literally cut your bill by 70% here forever. Savings: $60 per month

Extras: I would look ahead each month for those intermittent expenses (bdays, events, etc) and put aside money each month for those. Currently, we save $50 per month for those expenses. And maybe put away another $30 per month for maintenance needed. So add another $80 to your monthly budget.

Let’s take a look at the old vs. new numbers:

Total Income  $   2,462.00  $   2,462.00
Total Expenses  $   2,624.00  $   1,990.00
Ending Balance  $     (162.00)  $       472.00
Monthly Income  $   2,462.00  $   2,462.00
Total Income  $   2,462.00  $   2,462.00
Rent  $   1,175.00  $       900.00
Electric  $       275.00  $       125.00
Water/Sewer  $         80.00  $         80.00
Car Insurance  $       108.00  $         80.00
Cell Phones  $         86.00  $         25.00
Total Bills  $   1,724.00  $   1,210.00
Food  $       700.00  $       550.00
Gas  $       200.00  $       150.00
Total Necessities  $       900.00  $       700.00
Savings Buckets
Christmas  $         20.00
Clothing  $         10.00
Bday/Anniversary  $         20.00
Maintenance  $         30.00
Total Other  $                –    $         80.00
Total Expenses  $   2,624.00  $   1,990.00


If you make the above changes, you are going from -$162.00 per month, to saving almost $500 per month!

So yes, on the surface, saving 50% of your income may look impossible, and for some, there’s a long journey ahead to get there. But impossible? No.

According to your new budget, you are now saving 20% of your income. Now to just tackle the income side of the equation, check out this post on 20 Ways To Make Money, and get to hustlin’!

Comments: Any more suggestions here?

photo credit: SalFalko via photopin cc

Jacob Wade

Jacob Wade

Jacob Wade has been a nationally-recognized personal finance expert for the past decade. He has written professionally for The Balance, The Spruce, LendingTree, Investing Answers, and other widely-followed sites. 
He’s also been a featured expert on CBS News, MSN Money, Forbes, Nasdaq, Yahoo! Finance, Go Banking Rates, and AOL Finance.

In 2018, Jacob quit his job and his family decided to sell everything (including their home) to take off on an adventure. They traveled the country in an RV for nearly 3 years, visiting over 38 states, 20+ national parks and eventually settling in the sunshine state!

59 thoughts on ““Saving Money Is Impossible””

  1. This is a great break down for this reader. I frequently have clients tell me they “can’t” save and don’t have money. And it is not a matter of can’t it’s a matter of not willing to make hard choices and put in hard work to change. They may have to live somewhere different or change their food costs some, but hard work and savings will feel so much better than debt in the long run.

    • The savings is there, but it will definitely be hard work. And it goes to show that hard work makes the difference between losing money every month and saving a large chunk of money. Totally worth it, IMO.

  2. Great stuff. This is why its so important to write everything down when budgeting. Only then can you analyse every expense to determine:

    a) is it necessary?
    b) can it be reduced?

    All those savings you have identified seem reasonable and should help the reader on the road to the magic 50%.

  3. It can be helpful to look up what the living wage is in your area. Here is a link to living wages all over America: http://livingwage.mit.edu

    I don’t know where your reader is emailing from, but in my area with his family size, he is making less than the living wage. I do not live in a high cost of living area. He could probably spend less in some places (thought I am doubtful that he can cut his electric bill in half in the middle of winter- since there is no gas bill, it looks like this is what they are using for heat) but it would probably be more helpful to try and figure out how to bring in more money, too. In his case, poverty is keeping him from getting there.

    His biggest savings that I could see here would be the phone bill and the grocery bill. If they can find cheaper rent, that is great, but it is often not possible. If they have to eat gluten free, that makes things harder, but a cheap way to go about doing that is to stop buying packaged gluten free things and just eat food that naturally does not contain gluten instead. (rice and beans are gluten free, for instance, and so are beans and rice.) This is a LOT of work to figure out and to change your way of eating, especially with kids, but it could be his best strategy.

    • eMeals has a gluten free menu, that’s why I suggested giving that a try. Should be able to save some money with that. I agree, food budgets are tough, and require some discipline, but can be enjoyed for much less when meal planning properly.

      As for moving, if you are renting, there is not reason NOT to look at lower cost options. Saving $250 per month is $3000 a year. That is literally taking their budget from the red to the black. If they can move, the long term saving implications are ENORMOUS. I never want to take moving off the table because it is “too hard”.

      • Yes, it is great when moving can save you money, but it does generally require getting together first + last + security, and I am assuming that these folks do not have that kind of cash saved up on hand, if they currently have a negative savings rate. And they would have to be at the end of their lease or in a month to month situation to make that work- this might not be something that can happen for several more months. It is a great goal to work towards, though.

        • True. They can also talk to their current landlord and see if there are cheaper options within the complex, and may be able to avoid that cost. Or even look for comparable apartments and tell them they want a rate adjustment to match market rates.

  4. I would have to go with find ways to earn more. While I see there is some play with regards to cutting expenses, that only gets you so far. The person needs to look at his skills and find ways to make more money. Poverty is not a joke, but settling for it is also not one.

  5. I agree with most of the suggestions up there – EXCEPT rent. That’s a tough one. Why would someone live in a place that costs that much if they could move somewhere more affordable ? Maybe its a safety issue or maybe he has ‘imperfect’ credit.

    • In the city I live in, 900 is the extreme low end, for apartments. To go below that you’d be renting with roommates/renting a room in a house (common here for students) which is great if you’re a student or single adult, but doesn’t really work if you’re a couple or a family.

  6. Saving 50% on one can be hard, I agree. Impossible? No. I guess it depends a lot on the wage. When someone wants to get out of the ‘poverty trap’, they need to work at it.
    Paying that much rent with heat and lights on top, I would think saving for a deposit and buying a house would be a top priority. Until then, you find cheaper rent.
    As mentioned, using GF is just an excuse for a high grocery bill. Dairy, fruit, vegs, meat, eggs etc do not have gluten. Eating nutritious meals do not cost a lot. There is no reason why that food budget couldn’t be $400 or less.
    Shop second hand, yard sales for as much as possible. If the clothes and toys are in good shape, they don’t care where they came from (we have bought toys from yard sales for presents) Instead of presents to others, give a coupon booklet, or hand made gifts. ( one year everytime I made cookies, muffin, loafs I froze some.For my mother’s birthday, I gave her a large assortment of baked goodies)
    When we paid off our mortgage, we continued to save the mortgage payment. When I went back to work, after the kids were older, I saved my income.We managed on it before, and we managed again.
    The biggest hurdle, is attitude. Once you don’t see it as something negative, every payday, you are one step closer to your goal.

  7. I totally can relate to the reader’s sense of frustration and dejection. I finally got to a point where I was too feed up, and too tired to continue dealing with the situation. I think that they just need to start small and build up. Start with 5% in mind, then increase the number. I started taking a really hard look at what was in my control and was surprised to find that there were things that I could do to make some changes to my bottom line. I think that your reader should have a family pow wow and make sure everyone is on board. Commit to 1 year. Move to a new place and downsize (temporarily). Check out websites to make the idea of downsizing fun! Side Hustle. I was shocked at how much my side hustles helped. Shop for food only on the weekends-or every other weekend. Again, work with your partner on a meal plan/snacks/etc. It can be done. Check out the Economides family (if you google them their website pops up). Have faith. We know you can do it! Good luck!

    • Great ideas Michelle. And yes, sometimes starting with a smaller goal can help. I their case, they COULD get to 20%, but even if they start with 10%, that’s better than their current situation.

    • This is the most sensible response to these two articles I have read. Small goals add up. Settings g an initial goal of saving 50% is not only discouraging to those who are truly living in poverty, I would argue it is detrimental to their overall financial growth. It has been proven time and time again that the main reason people stay in poverty is due to a lack of hope. Articles with crazy unrealistic goals of savings only widen the gap for those people. It is not inspiring or encouraging.

  8. I sometimes still feel like it’s impossible when things aren’t moving fast enough, but to just say and think it’s impossible will really make it impossible. There will always be some kind of hindrance, but just need to find a different way like you did with the budget for the reader. Maybe it takes time and many trials, but let’s not say impossible and let’s not blame poverty especially living in the US.

  9. Under the cell phone part of the budget, I’m not sure if you added the actual cost of the phone in the first place so having two smart phones for $20 may not be a real representation, but would like to offer an alternative. My family years ago switched from Verizon to Trakfones at a cost of $10.50 a month per phone. Bill went from…..
    4 phones = $134 monthly – Verizon
    4 phones = $42 monthly – Trakfone
    Nearly $100 saved a month was a huge relief on the budget. I’ll add the new phones are fine and have no issues with them in the Midwest area.

    Thank you Jacob for another fine article, this case study is great way for others to look at and maybe adapt some part of it into their daily lives. One change at a time will add up.

      • Sorry for the slow response Jacob

        $30 for each phone that were tripple the minutes + 200 bonus minutes.
        $99 card 400 minutes x3 + 200 bonus = 1400 minutes.
        Divide that by 12 months = $10.75. Can always add a card if needed.

        No complaints so far, simple phone that hits the Verizon Network. I don’t do crazy calls much but hit quite a few texts a day. If a person hits the google there are tons of articles on this. This idea is not for everyone but I still work with people that don’t need the fancy phones and if your broke this is a must have option to consider.

        Tip: Hit Trakfone first to make sure they support your area and what phone you can use, then head to Amazon and see your options there. Read Amazon reviews to get an idea.

  10. I can appreciate the frustration, but you are absolutely correct with the available cuts to expenses. We aren’t at 50% yet (we’re working on 50% for debt payments, and later on switching that 50% to savings), but we are constantly looking for ways to increase our income and optimize our dollars. We are currently in the process of getting rid of our car to switch completely to public transportation, and we are switching to Republic Wireless in September! It’s weirdly fun for us to live off less these days…

  11. Going back to saving 50%, I have a few questions on what would constitute “saving.”

    We save cash each month towards car replacement, etc.. does that count as “saving?” It isn’t retirement but it’s also there for long-term goals. We also give approx. 10% of our income to our church. Does this count? Again, it’s not “saving” per se, but it is money we aren’t spending each month.

    If you count the above mentioned items as “saving” then we are indeed saving 50% or even slightly more of our income. However, we are currently in the process of (hopefully) buying a short sale home and are hoping to make extra payments to pay it off in 10 years or so, which would lower our savings rate (although personally I would count paying extra on a mortgage as a form of saving since you are saving on interest).

    Also, I am not trying to sound the least bit snarky, but as a fellow eastside dweller I will say that 2014 rent for a 2-bed in Redmond is going to cost you far more than $860. We pay substantially more than that for a 1-bed in the same area, and that’s for an older, “cheaper” apartment. 🙂

    • Yes, saving doesn’t only mean “retirement saving”. That’s why I called it “50% rule of spending”, because saving toward anything is still saving. All saved money should have a purpose, whether it’s in the near future or far away.

      And thanks for the update on Redmond rents. YUCK! 🙂

  12. Great post!!

    We live in Los Angeles and I can tell you, our cost of living is craaay-zy! That being said, we are still socking away 20% of our income. My husband just got his review recently and got a pretty substantial raise. All of it is going to our savings – why? because we know how to live off of what we were making before so why mess with a good thing?

    Our condo that we’re leasing, we also signed a long-term lease so that we can save some money off the rental per month. We could probably upgrade to a bigger place, but that would mean increasing our rent by $500 or more. I think we’re fine in a smaller space. Besides, we don’t buy more clutter because of it. 🙂 Savings is a priority. We just make sure that we save first before we spend!

  13. The whole attitude of “can’t” is so self-defeating. It’s absolutely true that some situations are more difficult than others, and this reader definitely seems to be in a tough spot. But as soon as you start using the word “can’t” you just doom yourself right from the get go. The alternatives may be few and they may be difficult, but they’re almost always there.

  14. I totally sympathize with not having a lot of money, but the excuses are tired. They will have a lot of excuses as to why they can’t do the new budget you proposed, and they will all start with “yeah but I don’t WANT to…” or “Yeah but I don’t LIKE to…”

    Dave Ramsey said it best. To paraphrase:

    You aren’t going to start saving money when you get a new job, or when you get a bonus. You aren’t going to do it when you get an inheritance, or pay off the student loans. There is only one time you are going to start saving money: When it becomes VERY, VERY important.

  15. I actually save/invest more than 50% of my income each month. Ironically, I actually don’t work to a budget, instead, I simply know how much I need to invest each month.
    I know it’s a little backwards, but it seems to work for me.

    At the moment I am trying to cut down on small regular monthly payments that you don’t even notice coming off your credit card. Already I’m saving over $200 per month!

  16. 85% savings rate with exactly this income in a place where 5$+ gas per gallon is considered cheap.

    Though I do have a different circumstance,partly due to luck and partly due to choice.3 big ones:

    Rent is important to go down as low as possible(really!!!),in my case there is non.(luck)

    Transport,I sold my car and I take the public transportation and walk 2 miles to work(and back) daily no insurance,no taxes.Gas bill to pay cut at least in half.(choice)

    Food:optimize every aspect of shopping for groceries and really evaluate each item,some can combine with others,some are perfect for satiety(feeling of fullness) ,others such as fruits and veggies,etc go well to balance it out.My cost for 2 persons (100$)

    Cellphone I go prepaid and use it only for emergencies (5$) per month.
    Internet and cable come as bundle cannot seperate in my country so I deal with it.

    I live in a country with constant temperatures of ~ 32 degrees celcius(tropics) so an A/C here is considered a nessecity,my opinion is somewhere in the middle as I use 2 standing fans and let the A/C always turn itself off after 1 hour (so im asleep and won’t notice)
    This means electricity is cut extremely low for here especially since we have an inverter.

    Birthdays,occasional eating out and buying family dinner is what I use (very sporadic) overtime on and the fixed holidays on which I get paid double.

    As for the bonus’ those go for my tech/clothing wants or If I want to boost my saving rate,to my savings/investments.

    Even if it all would go to hell and I’d have to pay for rent,had a kid i’d still have at least over 50% savings considering all my methods for saving are quite extreme,but you reap what you sow and I intend to sow a ton.

  17. Don’t worry too much about all of the disbelievers. When my first home payoff story was published on Yahoo, there were all sorts of haters. Mainly because house prices in Texas are extremely affordable compared to where ever the commenters were from. Or they thought that overpaying my mortgage by $400 a month isn’t realistic for most people.

    But it’s good that you try to point out their options. I sort of blew up and posted a reply on my own blog called “Hey Whiners, Bite Me”. Yeah, apparently, I am not as nice as you are. 😉 In my defense, the post actually covers why I think the excuses were excuses instead of valid points…

  18. Skipping eating out and packing lunches every day has saved us a lot on our budget.
    You’re right about the car insurance, but Geiko isn’t the only company that we checked. We check every company when something changes with our car or house to see who has the best rates. Even if they were previously more expensive, sometimes that changes for some reason with new details. It is always worth a call. We saved several hundred on our home owners insurance just by calling someone who we expected to be much more pricey.
    Thanks for the great tips!

  19. I always want to say “Just change your mind!” It’s not crazy, you just have to change every model of budgeting you’ve ever seen and completely rearrange your outlook (no big deal…). But I agree, totally possible. Think big.

  20. Some great tips!! Now that I’m debt free, I’m not stopping there, I’m trying to cut down on my frivolous spending.

    I tend to spend at least $150 a week on eating out, so if I can cut that back, Mrs Ikonz and I will be saving a fortune!

    I’m also trying to cut back on a bunch of regular payments that come off my card each month such as unused gym memberships, car insurance and memberships that I don’t use.

    I’m really hoping to squeeze out a minimum of $600 a month and put this towards investing and building my emergency fund.

  21. I love how you break down peoples budgets and offer suggestions.

    Here’s what I find. When you start your financial improvement tactics there are areas that you don’t cut because you can’t see doing away with it. When the low hanging fruit has been dealt with, you start looking for more opportunities to saving, having built up a bit of confidence. You start to become conditioned to living on less than you used to and this kickstarts a snowball effect, where you stop spending on things you never dreamed of before. It’s a journey, that’s for sure!

  22. Budgeting and trying to save is such a tedious task for me. I easily lose track of our expenses and it is really not helping. I’ll surely try to follow what you are doing here. Thanks for sharing.

  23. Rent: To move you need at least twice the rent saved up-front, and money for application fees, utility deposits, transportation, etc. It’s also constrained by area wages and available housing costs. A very A-to-C suggestion.

    Car Insurance: The price you’re suggesting cannot be legitimate, unless you’re driving total lemons in the middle of rural Nowhere.

    Food: Even being a strict bargain-hunter getting only the bare essentials, I’ve not once saved $100 a month by being a price stickler.

    Gas: Carpooling is more often than not an irrelevant suggestion. Even in busy areas, unless you’re neighbors with your coworkers, this isn’t feasible.

    TL;DR: Basic denial of the fact that for some people, saving money is literally impossible.

    • Rent: And after moving, you get your deposit/last month’s rent BACK from the previous rental, which was more expensive, so you should get MORE money back.

      Car Insurance: We pay $80 per month for two vehicles, including fire/theft/towing. In the Seattle area. We only drive fancy cars.

      Food: 5dollardinners.com, emeals, and a million other sites show how to bulk buy and coupon shop your way to food savings. It can be done, and has been done.

      Gas: Many people are neighbors with coworkers. That’s why carpooling exists. Don’t write it off just because you aren’t. And if not, bus routes are also an option.

      TD;LR: Refusing to try will not save money. Thinking outside of the box and your comfort zone will. And if that doesn’t work, side hustle some extra income to make up the difference.

      All that to say, saving money is NOT impossible, but may be MUCH harder for some. The only 100% full proof way to NOT save money is to give up before you even try.

  24. I think that while 50% would be great, it’s only realistic and easily doable for a young person getting their first job and having little to no expenses. Getting to a high figure like 50% when you’re a bit older (after college or starting a family) isn’t going to be achievable. My aim for next year, at 31 years old, is to save between 10 and 20% of my total income. In order to do this though I will be working 2 jobs and getting student loans from my college!

    • Lauren, that’s an awesome goal! Most your age with a family can’t save anything, so 10% – 20% is HUGE!

      I do know quite a few people (with families) who have been able to achieve the 50% savings rate, but it’s NOT easy. And there are certain times in your life where you simply cannot, but I think it’s a fun goal to work toward. I am turning 30 this year, and we’re not there yet either, but it’s something I really want to achieve in the next 5 year or so. Going to take a lot, but it keeps me motivated 🙂


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