The issue of saving money is an age-old issue in America. A lot of people don’t understand, or practice the concept of saving money. 7/10 American have only $1,000 or less in their savings account, so just imagine how many people don’t have a savings account at all.
There are no clear-cut ways on how to successfully save money. If you ask 10 people to give you a list of 3 ways to save money, likely you’ll have all unique lists, with just a few overlapping answers. That’s because, what works for one person may not work for the next person. However, you won’t know what works for you, until you give it a try.
Here are 7 Things to Avoid When You Want to Save Money:
If you know that you are tired of living paycheck to paycheck, and you want to get your finances in order once and for all, the time is now. There’s no need to wait until you get a new job, wait until you get your income tax return check, or wait until your next paycheck. Once you make up in your mind that you want to start your process to financial freedom, the only thing stopping you, is you.
Not having specific goals.
If you are a competitive person, try to make your savings plan a game of sorts. See how much you can save in a certain amount of time. If you are not competitive, set a logical amount to put away into a savings account, and watch it grow.
Not tracking your spending and spending too much.
You cannot save, if you spend everything you earn. Failing to track your spending, can result in you overspending. Make your budget and stick to it. There are mobile applications that you can plug your income, bills, and expenses into that tracks your spending for you. Or you can create a spreadsheet and do it yourself manually.
Claiming the wrong tax withholding.
Claiming the wrong withholding can cause the federal government to take more out of your income taxes each paycheck. At the end of the year, you get a large income tax return. This is not a good thing, you’ve pretty much given the federal government interest free money and aren’t getting what you’re owed back in return. File the correct withholding and get what you deserve each paycheck, and you that extra money to put into your savings.
Putting off high-interest debt.
If you have high credit card debts or student loan debts, it is time to start making payments to get those down. Even if you are not required to make payments on your student loans at this time, try to pay down the accrued interest on those loans. It’ll help you out in the long run and save you money. The faster you pay debts down, the less interest they accrue overtime.
Not having an emergency fund.
Emergencies are expensive, especially vehicle related emergencies and medical emergencies. We’re talking about bills into the thousands of dollars. An emergency fund is essential to help you to offset the costs of the emergency. You can have a long term emergency fund and a rainy day fund. The emergency fund should be used in the case of medical emergency or in the event that you suddenly use your main source of income. The rainy day fund should be used to cover an unexpected expense like a school trip for the kids, for example.
Signing up for retail newsletters.
Retail newsletters can really persuade you to spend money unnecessarily. Oftentimes the retailer will send coupons and special offers via emails, with an expiration date, creating a sense of urgency to buy now. It’s a way to entice you to spend money. By avoiding these newsletters, it’s out of sight, out of mind.
Regardless of if you choose to do 1 or all 7 of these tips, you’re well on your way to financial freedom. The true 1st step in that process, is just doing it. Don’t let anything or anyone convince you that saving money is too hard, or impossible. You can do it. Whether you open a savings account through your financial institution, put money under your mattress, or in a shoebox, you can start saving today.
How much money you make, or don’t make, is irrelevant to how your spending habits affect your savings. It is key to understand what your spending mistakes are and how to correct them, to maximize your savings.