Top Reasons Why Some People Don’t Save Money

why some people just won't save, budget, saving, debt
Marshmallows, cockroaches and stubbornness

We are a nation of consumers. If you head down the bread aisle, there are about two dozen types of bread choices. All with their own different brands and marketing. Pull back again and take note that we are a nation that has an entire aisle contributed to bread!

It seems absurd that the average American under the age of 35 have less than $6,000 to their name 1. To a lot of individuals who are personal finance enthusiasts, it’s kind of like entering the Twilight Zone. Someone with a five-figure debt can go out, buy a new Toyota and still be happy with that purchase knowing the avalanche of debt they have just acquired. Sadly this is not an extreme example by any means. So why is it that some people just won’t save?

Delayed Gratification

Did you know that my major in college was neuropsychology? Developmental neuropsychology to be exact. That stuff was like ocean’s breeze to me, easy breezy. Years later, I started cracking into behavioral finance and the topic of ‘delay gratification’ kept popping up. One particular study – a gem in developmental research, involving marshmallows!

The Stanford marshmallow study was a ground breaking psychological experiment completed between the late 1960s and 1970s. The experiment involved little children (age 3 to 6) of equal genders. The children were told they can eat one marshmallow now or wait and get two marshmallows later. Basically, one treat now or two treats when the experimenter returns.

All the children received marshmallows either way but the children who can delay gratification got twice the marshmallows after 15 minutes of unsupervised waiting.

The videos were adorable. A struggling club of rug rats scooting their booty trying to fight the enticing marshmallow before them. Some children consumed the marshmallow the moment the experimenter left the room, some children bounced struggled and squirmed until succumbing to the soft gooey treat, and finally, some children were able to wait the entire time to get the second marshmallow. The children who were able to delay gratification had better life outcomes.

“[the children who waited] ended up having higher SAT scores, lower levels of substance abuse, lower likelihood of obesity, better responses to stress, better social skills as reported by their parents, and generally better scores in a range of other life measures.”2.

I bet money the children who were able to delayed gratification had fuller retirement accounts too. Good job kiddos!


Learned Helplessness

When your situation looks bad, it is much easier to give up hope than look for another solution. Learned helplessness is a similar phenomenal where people attribute negative consequences to an internal characteristic that is perceived as stable. For example, someone who has problems saving money associates the problem with “this is just who I am” then they will have a much more difficult time breaking from the cycle. The individual who do not believe they have any control over their situation do not direct themselves towards a solution based mindset.

We used the same perception with others under the guide of fundamental bias. This is probably why personal finance mistakes (such as properly battling credit card debt) is so embarrassing. It’s easier to give up on something than to fight it.


Health Issues

O.K. not everything has deep-rooted psychological problems. Some people simply have bad health. Weak immune, weight, blood pressure, diabetes, allergies etc. I have a select few among my peer group who question their own longevity beyond the age of 35.

Surprise, surprise – none of them saves! If you have consistent and bad health, why would you save or work towards an early retirement? Should you not just enjoy every day while you still have it?

Top Reasons Why Some People Just Don’t Save Money

I am not really sure how to respond to something like this. Admittedly, I do take my health for granted. I pride myself in having “Cockroach DNA.” (I’m so proud of that term I want to copyright it, just like when Paris Hilton tried with “that’s hot.”)

Cockroaches are gross but cool. They have thrived on the evolutionary periphery for 320 million years! I’m a cockroach. I grew up in the United States without any insurance for the majority of my life because my family was dirt poor. Yet I run like a well oiled machine! I am a cockroach! 😀



This one is simple, I’m stubborn. Thankfully I’m stubborn persistent when it comes to money. Some people are fastened to their pattern of spending. It does not take long for a spending habit to solidify. Money habits develop and set during adolescence 3. Debt is personal; admitting any fault can be difficult too. There is no real problem with overspending until the music stops. For individuals who tend to be stubborn, it takes a massive shakedown to break the cycle. Tack on the three other issues addressed above on top of that and their behavior never changes.


Parental Influence

Great point contributed by Mrs. Groovy. Parental influence play a huge factor on what we learn as children when it comes to money management. We tend to emulate our parents so if our parents were spendy, we tend to gravitate to spending as well. It’s what we know.

My husband and I both came from frugal households. My parents were frugal by force since minimum wage in San Francisco doesn’t get you very much or very far. Hubby’s parents are your traditional millionaire’s-next-door types who were conscious spenders and well prepared for anything.


Higher Income Later

Ah, a great point from Mr. MSM. I totally missed this point myself even though I’ve seen this thought process in action plenty of rounds before.

Personally, I think it’s a total excuse and probably the worst offender on the list to have. Unless you are a starving graduate student who is banking on a six figure salary after graduation, I see this mentality as a completely dangerous one. Who really knows what the future will be?

Later is always the perfect excuse and it’s starting to become my most disliked word. Referencing back to the sensitive areas of development in my previous point, I believe for many people who have problems holding onto money that it’s important to get into the habit of saving. Practice makes perfect.



I can vouch for this. My parents did not drop a pound of knowledge on me in terms of managing money. I saw they were frugal by force (being poor) and I copied their frugality. If it was not for that critical part of my life where I noted the importance of saving from my demonstrative parents, I would have spent most of my money too. A lack of financial awareness is forgiving. Financial awareness doesn’t hit everyone at the same time but a late start is better than no start at all.


YOLO Mentality

This was a great point by Ying, who wrote a follow-up post on this one about why millennials have a hard time saving. Believe it or not, I fell victim to the same mentality too! From the start of college to a year after college…and I didn’t totally snap out of it until I turned 23 years old.

I even recall when I was 20 years old, I bonded over the “importance of being pretty” with a girl I shared a lab schedule with. I said “we’re only pretty right now – it’s not like we’ll be pretty when we’re 50. If I wanted that dress and I’m still a size 2, then I should be able to buy that dress guilt-free.” She nodded along in unison like I was the preacher for dumb vapid girls dot com.

At the time I was foolish enough to believe it to be true. Shouldn’t I capture youth because youth is fickle and beauty will eventually fade? Why should I save if I need the money right now to look my best? Oh…boy…this is embarrassing. Having just turned 26 I wish to turn back time and slap my 20 year old self. Youth is something everyone gets to experience once but the rest of your life is something we’re all stuck with! That’s the right reason to save! Please kill off that YOLO mentality before it’s too late.



What are some other potential reasons why someone won’t save? Do you think having health issues and questionable longevity excuses them from pursuing financial freedom?

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26 thoughts on “Top Reasons Why Some People Don’t Save Money”

  • I think other reasons for not saving include the environment a person was raised in. That’s not to say that every spender comes from a family of spenders. But we do learn from our parents.

    Do you know of Erin Lowery/Broke Millennial? She’s been on several podcasts recently and her book just came out. Her family was pretty well off yet her father took a portion of her Halloween candy as a tax for taking her out trick-or-treating.

    • Oh yes, environment and parental encouragement are huge factors. I should put that into the post as well.

      Oh that is epically funny – I have heard of Broke Millennial (via Twitter) but I did not know that her father taxed her Halloween candy! Actually…I was thinking of doing the same thing with my children someday!! Not with candy exactly, but their allowances etc (then put the taxed amount into an investment account for them). I keep getting disapproving headshakes from people though. Here I thought I was being original and a total genius…what do you think?

      ps thank you for stopping by :D!

      • Mrs. Groovy makes such a great point. I was just writing about this–trying to lay 100% of the blame on my spendy ways to my parents! Ha. Just kidding. That’s my personal pet peeve, blaming your behavior on others. But it is true that if you grow up in a frugal household, frugality is subconsciously imprinted on your psyche, and spendy behavior actually becomes somewhat abhorrent (as it does to my husband). I’ve had to spend much of my adult life reprogramming my baser instincts to stop myself from plopping down large, unnecessary amounts of money on crap–that is– stuff.

        • Thanks Laurie! Mrs. G is often very very right! Blaming others is my pet peeve too – it’s too easy. I use to do it a lot when I was a teenager but much less these days 🙂

  • My wife and I weren’t savers at first, but we learned how to. In my early career as a teacher, we weren’t making much money between us, AND we tended to use credit, when we had no business doing so.

    I remember the experiment with the kids and the marshmellows. Pretty interesting, and entertaining video. 🙂

    Your Cockroach DNA comment cracked me up. 🙂 Health issues can prevent folks from saving. When you have only so much $$ and you have to pay to take care of your health, it’s hard to put savings on the front burner.

    I’ve SO witnessed Learned Helplessness. I worked with Low Socio-Economic families in the ’90’s and saw how most viewed themselves.

    Great info! I’ll be looking forward to reading more of your stuff.

    • Hi Shin! Thank you for dropping by! I saw your article on RSF!!

      Mad props to becoming savers Shin! Saving is a learning process. Virtually no one saves a large chunk of their income right off the bat. It took me and my spouse 2.5 years to get serious about attempting a 70% savings rate. It’s about getting creative with ’em hustles, learning (with help from the PF community), and mitigating risk (cockroach dna helps!).

      Haha I witnessed Learned Helplessness within my own family. I might be one of the low S.E. kids you’ve worked with :p It took me a veryyyy long time to get over my mental blocks. I am going to write a series about poverty and all the ramifications that I have become self aware about over the course of 25 years on this rock.

  • I may not be the best person to ask since I’ve never had kids. BUT, since you asked, personally I wouldn’t tax their allowances. Some parents give allowances based on chores/work. Even in that situation though, I probably wouldn’t tax them.

    Chris at has a current post on allowances. He also has a recent one about an experience with his daughter running a lemonade stand. I like what he did. After his daughter determined her profit he reminded her that he needed to be reimbursed for the lemonade supplies and that her little sister needed to get paid for helping her.

  • Comedian John Mulaney says it’s 100% easier to do nothing than something. I find that is true with personal finance.

    There are many reports that say the average employee doesn’t change their 401k elections from the default.
    So laziness and lack of caring also attributes to not saving.

    • Thanks for visiting BoaS!

      It sounds like those Ronco “set it and forget it” motto has done more to our mentality than suggested. Just kidding! I think to a lot of people 401K is like this super weird, complicated thing. “What is rebalance? Allocation? Better not mess with it, nope.” *Closes tab*

  • I don’t know why people won’t save. I have a roommate who is living paycheck to paycheck – it doesn’t seem to phase him when he has to be late on a rent payment…

    I don’t get it. I try to save at least 40% of my income each month. I’m at 50% for the year and need to keep it up!

    Thanks for sharing FG

    • I know what you mean Erik, it puzzles me too. But I don’t overstep, it is personal finance after all. I rather not lose a friend 🙁

      Oy! 50% is amazing! You know what the three sweetest words in the dictionary are? Collecting passive income! *dance a celebratory jig*

  • I think too many people are overconfident in their ability to save for retirement later in life. I know I had a roommate that reasoned he would make more later in life and could save then. I decided not to argue with him but I definitely didn’t follow his advice. I think he’s still spending away with no plan in place. Oh well to each their own.
    Mustard Seed Money recently posted…The One Skill That Will Boost Your Income By 50%

    • That is an another excellent point! Hey, maybe he is right and land a huge gig later in life. I think the statistic is much of the wealth building starts when people hit 40 I still think it’s much better to start when you’re young (if you can afford to)..but to each their own.

      Btw, I installed CommentLuv when I saw that you were using it! Hehe.

  • Wow, Lily. Lot of wisdom in this post. Our DNA definitely conspires against us–or at least a good portion of us. What percentage of children in the marshmallow study ate the marshmallow right away? I wouldn’t be surprised if the number approached 50%. The only thing that has a chance of countering our DNA is culture. We need a culture that unequivocally extols the virtue of delayed gratification, of saving, and of working hard. Sadly, our leading culture-makers have different ideas on what to extol–just spend, party, and don’t worry about the basic necessities of life, that’s the government’s job. Sigh. Any thoughts on how to fix our “culture”?
    Mr Groovy recently posted…Sure, I’m the Fabulous Mr. Groovy, But I’m Still a Dude with Flaws

    • I did try to find out how many of the children from the original study did eat/did not eat the marshmallow but I do not have access to JSTOR anymore (they revoked my academia-ness essentially). Sigh, 40K a year education and I can’t access a scholarly source after I graduate. Nice set up.

      I think our over indulgent culture was addressed in the Millionaire Next Door. Basically, no one wants to watch a guy pick up a penny, come back to his 140K house in his second hand boring. We would have to revamp our entire culture and that is not possible without going ‘North Korea’ on everybody.

  • I can’t see not saving. It is ingrained in me. It gives me peace of mind. If I was living paycheck to paycheck with nothing in savings..I would definitely feel stressed. I went vegan a year ago and have really transformed spiritually and I find I need less and less to feel fulfilled. This is big for someone who loved weekly mall trips and eating out every weekend. I now enjoy home cooked meals and time outdoors really does the soul good. Best of luck!

    • Your savings mentality is just like mine. I use my savings as a type of self therapy to relieve anxiety as well. I do not want to be dangling on the edge of debt because of a shiny new toy. There’s better things in life to hope for 🙂

  • I think health is a huge issue! But beyond just the fatalist mentality of “I’m going to die young so why save?” there’s just the pure financial expense of a very serious health problem. I think it’s one thing if you have a long term health issue that can be resolved with a monthly prescription, it’s another if it’s an ongoing expense.

    I think many have to spend so much money on healthcare, either for specialists with high premiums, or some doctors who don’t take insurance at all! I know many psychologists/counselors who don’t accept insurance (as opposed to psychiatrists who just prescribe medication), but they would be the ones who are teaching patients how to actually cope and live with their health issues.

    I can’t imagine having to pay for that expense constantly, it would definitely make me feel defeated :/ It would also make it hard to not reward yourself because you’re dealing with more stress than the “average” person. I myself notice if I’m having a really stressful week, it’s more difficult to limit spending, so just imagining having a persistent health issue…well I really just can’t even imagine how difficult that would be!
    Jing recently posted…App Review: Earny Automatic Price Protection

    • Yup yup Jing. If I had an on going expense and I would have to constantly watch what I eat, what I do, how much I move…that’s where all of my self control is going. What amount of self control is left for me to hold onto my purse strings? I feel defeated just pretending to live through that.

  • Start small, start now. When we were first married, I saved $1. a week for Christmas. One bank teller laughed at me. I switched banks. It was the difference between have $25.00 each to spend on a Christmas present or $3. or $4. Those with health issues have a greater reason to save – it’s likely you will not be able to work until you are 65. We always had health bills, but when I knew I would not be working much longer, it was amazing how much money I was able to save. Thanks for liking my post, “No Oven April to October.”

  • Thanks Lily for such a realist take on the matter! We can find excuses for just about anything when and where we want to. All too often people become their own barriers to reaching the financial freedom they really want. I love reading articles like this and I appreciate your perspective.

  • I struggle with saving money when I don’t give every dollar a job. It’s easy for me to spend money when I don’t have a budget in place and I think that’s why a lot of people struggle – they don’t have a budget in place

  • I have trouble saving due to my income changing every month. I forget that I have to reaccess my income and budget, and the lazy part of me often forgets to!

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