5 reasons why you can’t save on salary


The saving rate of Saudi families is one of the lowest in the world, and this constitutes one of the most important challenges facing the implementation of the objectives of the Financial Sector Development Program. Through this program, the Kingdom seeks to raise the percentage of household savings on a regular basis to 29% by 2020.

If you went through the experience of preparing a plan for saving from salary but your attempts were unsuccessful, you should realize the reasons that lead to a waste of salary in order to proceed to treat it and thus be able to reach your goal of saving.

5 reasons why you can’t save on salary

No monthly budget

Usually spending without following a monthly budget is one of the most important reasons hindering the possibility of saving any part of the salary, because this may lead to deepening the gap between income and spending due to the inability to follow up and monitor expenditures.

This may cause an individual to consider borrowing or borrowing to cover living expenses. Therefore, setting a realistic and proportional monthly budget with income, and then determining the amount that can be saved from the monthly salary, and deducting it from the moment the salary is received will be effectively reflected in controlling spending on
Remaining salary basis.
[ 4 steps to effective financial planning ]

Not to distinguish between needs and luxuries

Failure to prioritize spending could waste a large portion of the salary on luxuries or unnecessary things. In order to facilitate the commitment to the savings plan, it is necessary to have the skill to control spending and reduce it as much as possible. In order to reach this goal, the salary must be divided and determined the amount allocated to daily and monthly needs, after that a portion of the salary can be deducted for entertainment if the remaining amount exceeds the target amount for saving.

High monthly bills

Negligence in addressing the causes that lead to an increase in the value of monthly bills that include, but is not limited to, electricity, water, and mobile bills, and subscribing to some health and entertainment services that will lead to an unjustified increase in spending.

Therefore, learning the culture of rationalizing the consumption of resources and services, in addition to urging family members to do so, will contribute greatly to reducing the value of monthly bills, which will have a positive impact on the savings plan.

For example, choosing a mobile package that fits the need, or cutting out unnecessary entertainment subscriptions.

Excessive debt

Some resort to debt in order to solve their financial problems, or achieve specific goals; this is not marred by any error, but the problem is that they deal with borrowing as if it were an additional source of income to spend on consumer matters.

Then the premiums increase due to a large number of debts until they get out of control, which leads to the loss of part of the salary to cover the costs of default and late fees and the cost of borrowing. Therefore, you should avoid the idea of ​​borrowing if the motive is a consumer.

Not saving for emergency things

Not planning to withstand financial pressures resulting from emergency matters or unexpected financial crises, such as stopping work or experiencing an accident – God forbid – are things that spoil the savings plan.

Therefore, experts usually advise allocating an amount of money to deal with such matters and that the value of this amount ranges between 3 to 6 times the monthly salary, provided that the savings plans are not compromised and that this amount is not used in long-term investments or financial instruments that cannot be disposed of easily.

Finally, dear reader, saving needs the will element above all. If you do not succeed in the first attempt, there is no harm in continuing to try until you achieve your desired hopes, taking into consideration the treatment of the causes that led to the failure of previous attempts.

Learning a savings culture has many benefits in the long run, because the sums you will save now will guarantee you a decent life in the future.


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