If you have grand plans to meet savings goals each month but find it hard to reach these targets, it’s time to take a closer look at your savings strategy. You could be making one of the following common saving mistakes.
Putting too much stock in special offers.
You always buy items on sale and search for deals, so why aren’t you able to save more? One thing to keep in mind is that businesses sponsor special promotions, discounts, and offers, with one end goal in mind: to get you to make a purchase. If you’re purchasing items on sale that you really need, that’s a good way to save money. But if you fall into the trap of buying items on offer simply because they’re discounted, this prevents you from putting that money into savings. Another factor to consider is that some promotional offers require you to sign up for ongoing subscriptions or services. Don’t forget to cancel trial memberships after you’ve taken advantage of the signup offers.
Skimping on the important expenses.
Another common pitfall is putting so much money into savings that you forget about other expenses – such as car maintenance or paying down debt. Although it’s important to set money aside each month into a savings account, if you’re heavily in debt you should also be working on paying off credit card bills at the same time. Don’t keep racking up interest by only focusing on hitting a savings goal! If you need help, financial planning courses like these at training.com.au can help you gain the tools to create a workable budget that addresses both concerns.
Not putting a regular amount into your savings account.
If you haven’t already done so, set up a direct debit that automatically puts money into your savings account each month. Otherwise, it’s all too easy to keep putting it off. Many of us only put money into savings when we receive an unexpected windfall, but this can cause us to miss the mark. It’s free and simple to set up a direct deposit, and it ensures that you won’t forget to save.
Underestimating your need for an emergency fund.
A good rule of thumb is generally to have at least six months of salary saved up for emergencies. This can help you if you get hit with an unexpected bill, lose your job, or get sick. But many people find that this isn’t enough, particularly with long-term unemployment an issue for many. If you have a bigger emergency fund, you’ll be better able to cope with unexpected expenses without losing the entirety of your savings.
Looking at saving as a chore.
If you dread putting money into a savings account each month, looking at it as a chore that only takes away from your fun disposable income, you’ll be less likely to take it seriously. If needed, you can set up separate savings accounts for different needs. One can be an emergency fund, one can be for retirement, and one can be for family holidays. Saving enables you to live a more comfortable lifestyle in the long run and afford the occasional splurge. Reward yourself when you start meeting your goals and view it as a challenge rather than a chore!