Seven Money-Saving Mistakes You Don’t Want to Make
Is it possible to make mistakes in saving money? Unfortunately yes, it is. The good news is, we can learn from the mistakes of others and apply them to our own situations. Following is a list of seven money saving mistakes you don’t want to make.
1. Careful with Coupons
While it’s a money saver to take advantage of sales and use coupons where you can, serious “couponing” is not necessarily a savings boon, say sources. For one thing, you aren’t going to find coupons for some of the healthiest foods: produce. That means if you rely on coupons only you may end up in poor health, which means more money spent on medicines, sick time away from work, and so forth. Hardly a money saver.
2. Budgeting for Savings
Too many people make the mistake of saving if the opportunity presents itself, or if money is just sort of left over. Big hint: money rarely just presents itself! Saving money needs to be a deliberate, thoughtful process and budgeting in a certain amount to save each month is a wise approach.
3. Restricted Accessibility
Savings accounts vary in their accessibility, but having one like a CD where you are heavily penalized for early withdrawal may be a mistake. If you do have money wrapped up in something of this nature, experts agree that it’s a good idea to start another savings account that’s liquid – that is, an account you can get at if you need it without penalty. Money market accounts are good for this.
4. Jumping on the Investment Bandwagon
There are two important points to keep in mind regarding investment opportunities: 1 – If you don’t understand it, avoid it; and 2 – If it sounds too good to be true, it is. As for #1, many investment fraudsters will be unclear in their explanation of the deal, causing confusion and sounding so technical that you figure they must know best. True investments are easy to understand; saving money should be simple. As for #2, don’t fall for the notion of “risk-free” investments with “guaranteed returns.” Baloney!
5. The Long Term
Don’t make the mistake of putting your money where “introductory rates” sound good. Nothing lasts forever, and after a year or so, those rates will change. Some promotional deals are excellent – the key is to do your homework. Find out what the promotional deal really involves in the long run. For instance, a promotional mortgage rate that’s rock-bottom low may sound great, but only if it’s fixed-rate would it be worth it.
6. Random Saving
It’s good to have savings goals. It can be a mistake to save randomly. Goalless saving also makes dipping into your savings for frivolous reasons a bit too tempting. Goals help you keep your hands off the savings unless it’s really necessary.
7. Savings Follow Income
Another mistake to avoid is to keep your savings at the same level even if your income and standard of living go up. If those things go up, so should your savings.