Are you trying to save your finance but find yourself unable to do so? There are different ways you can follow to save your money. Some might help you in the long run, and some may be short-term. Nevertheless, when you follow a strict budget and try to save, it might be frustrating when it does not work.
You might be unaware of it, but there are ways in which you might be self-sabotaging your savings. Some of them might be intentional, and some unintentional. Sometimes, we might spend our money in places we think won’t affect our savings, but they do.
So, then what are those unintentional mistakes you might be making? Fear not because we have listed down below ten ways you might be sabotaging your savings. This will help you to recognize them so you can avoid them in the future.
You do not have a Fixed Plan
We are not saying that you might not have a plan but how firm are you at following it? There are times where we become lenient and ignore some of the spendings. It might also be the case that you keep changing your plan now and then. Although it is fine to change your plan in case of an emergency, changing your plan can be detrimental. Here are some reminders that you can keep in mind.
- Make a strict long-term as well as a short-term plan.
- Follow your budget properly and make a count of your every spending.
- Every penny is hard-earned by you, so make use of it appropriately.
- Keep checking your plan once in a while to stay motivated to follow it.
More Earning Does Not Mean More Spending
Nobody stays at the same level for a long time. We keep progressing and sometimes might even get an increase in our income. We tend to get so engrossed in happiness that we end up spending more. It is a good thing to celebrate, but you shouldn’t forget about your goals either. Down below are some tips you can follow.
- Have a clear vision of your goals and wishes, and do not let anything waver it.
- It is alright to treat yourself but keep account of it and adjust it with your budget.
- Think of the increase in money as a way to reach your goals fast by saving extra.
- Alter your budget according to your new income.
- Do not fall for temptations, and remind yourself of your wants and needs.
You are Not Investing Your Money
While saving your money is a good thing in itself, but your money will grow at a tiny rate in your bank account. There is a faster way to grow your money, and that is by investing. It may sound risky to some, but some options are less dicey. By investing, your money grows over time, and it thus helps you to reach your goals faster. Here are some ways you can make use of it.
- Invest in secured fixed deposit plans backed by the government.
- Invest less amount of money in places where it seems too risky.
- Invest in real estate.
- Invest in a plan that matches your goal, such as a retirement plan.
You are Ignoring your Credit Score
Your credit card score plays an important role in your savings phase. A good credit score helps your get great deals and discounts or sometimes cashback. It also helps you get loans and mortgages at lower rates. All of this is can prove helpful to your saving plan so it is not a thing to be ignored. Down below are tips you can make use of.
- Check your credit history online and check what it is that you’re doing wrong.
- Do not feel hopeless if your score is less, you can always get back on track.
- Paying your credit debts on time is the best way to stabilize your credit score.
- Make use of online websites or apps to help you with your score.
Spending too much on Bills
We have to pay bills on something or another, but there are bills that we unnecessarily pay. Sometimes we might not be using an item and be paying for it regularly. This may include an online subscription to a website that we might be too busy to watch anything on. Or it can be a gym subscription you might not be going to. These unnecessary bills pile up and turn into a big expense. So, it’s better to check all your payments and remove any that you don’t need at the moment.
Debts paid with Savings
If you might be paying off your debts from your savings, then you should probably reconsider it. Your savings have to be what is left of your income after taking out every necessary payment, including bills. Keep in mind your savings are only for accumulation and nothing else.
Living On Debts
You might be making your purchases from your credit card. A credit card lets you make purchases now and pay later, which means you are taking a small loan. It’s okay to make payments with your credit once in a while but do not make it a habit. It might lead to a budget imbalance.
Not Learning from Others
There are a lot of tips and tricks by successful and productive people over the internet. They give out their personal experience, and some of it might be relatable to you. Here are some options you can learn from.
- Read a productive book.
- Listen to a podcast by productive people.
- Watch videos on YouTube about investing and savings.
Spending More on liabilities
If you buy a car or a bike, it acts as a liability because it makes you spend more such as on petrol and maintenance—moreover, its price decreases along with a price. But if you choose to buy a plot of land, then it won’t cost you anything but its price would also increase with time. So it is better to spend on an asset rather than on liabilities.
Following a General Advice
It is good to follow the advice you might have come across, just like this article, but you have to get personal. Your situation, income, and payments are unique to you, and that is why you should forge a personal plan rather than a general one.
This brings us to the conclusion of the 10 worst ways you might be self-sabotaging your savings. Keep in mind that some of the mistakes you might be making may not be on this list. It is up to you to figure out what is wrong and fix it to save your finance better.
Disclaimer: All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. Nothing on this blog constitutes investment advice, performance data, or any recommendation that any security, portfolio of securities, investment product, transaction, or investment strategy is suitable for any specific person. The owner will not be liable for any error or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. To encourage safety, we recommend you always consult with a licensed advisor before making any decisions related to information on this website. We recommend that you independently research and verify, any information that you find on our Website and wish to rely upon.
