The Rainy Day
Money Saving Mistakes People Make
We’ve all heard one of the most commonly used pieces of advice when it comes to money; save it for a rainy day. We are all told to save money; to build a strong savings account so our nest egg would grow for the financial security of our future.
In short, saving money is just an extremely smart thing to do. However, as smart a decision it is to save money, there are still those who make mistakes in doing this relatively simple task. Here are some common mistakes that people make when trying to save money:
Dipping into your savings
Everyone with a savings account has done this one way or another. The thing is, this is considered to be a mistake because there is a difference between a savings account and an emergency fund. We shouldn’t touch our savings account; however, it is our common go-to place whenever we’re in a financial bind.
If our credit cards and loans are due and for some reason we have problems with our income, it’s our savings that usually take a hit. It’s a matter discipline. Establish which of your resources are for savings and which ones are for contingencies. In the long run, you will be very happy you did so.
Starting Too Late
This is one mistake that’s hard to rectify. As young professionals, it’s a common tendency to not think about the future and enjoy the fruits of our hard work. As we grow older, we tend to examine the money we could have saved and how it would be able to help us; how different would our lives be if we had set a small part of our salary aside.
While some may say it’s never too late to start one’s savings, saving a small amount regularly for a longer period of time seems to be the easier option of trying to set aside a larger amount for a shorter amount of time.
Accumulating Debts
Some people have a tendency to use their credit cards instead of paying for cash, believing it saves them money. The simple point to this is that it doesn’t; not always at least. While you may avoid spending cash, your credit card debt would accumulate, thus you end up using the cash you have set aside to pay off that debt.
It’s the same with loans. The reason why this is considered a mistake is that there’s more to savings than just not spending money—it’s spending money wisely. If you choose to let your money go untouched and accumulate debt in the process, then you, frankly, are not saving the right way.
There are several ways to save money, but in the end, what would help you the most when it comes to having a sizeable savings account is the implementation of wisdom behind all of your financial decisions.
Avoid debts, avoid overspending, and avoid dipping into your savings. In the end, you’ll truly be able to enjoy the money you save. But just before you get there, a little prudence and personal sacrifice wouldn’t hurt.
