6 Mistakes You May Be Making When You’re Trying to Save Money

Jul 15, 2020 | Lifestyle

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Whether you’re saving for a dream vacation, a new car or to prepare for financial emergencies, you’ll want to make the most of your money. By avoiding these common mistakes, you can maximize your savings and reach your goals in record time:

1.  Earning No Interest

If you aren’t earning interest on your savings, then it’s time to switch to a new account. You’ll have the option to choose either a variable or fixed interest rate but make sure whichever one you go for is competitive. By doing so, you’ll get the best return on your funds without putting them at risk.

2.  Paying High Rent

If you live in rental accommodation, you aren’t getting any benefit if the property increases in value over time. Although buying a property may not be the best choice or a viable option right now, it’s important to consider the benefits of owning vs renting. By moving to smaller accommodation, for example, you could reduce the amount of rent you’re paying each month and increase the amount you’re able to save.

3.  Undefined Goals

Everyone knows they should save money but having a fixed goal and a plan is the way to make it happen. Instead of simply saving whatever you have leftover every money, make a budget, and decide how much you can realistically afford to save. Then, transfer the funds into your savings account when you get paid, in the same way that you pay your bills or your rent. Remind yourself what you’re saving for on a regular basis to ensure you stay motivated.

4.  Being Too Strict

If you’re too strict with yourself, your good intentions could come to nothing. Although saving is a great way to handle your money, you need to live comfortably too. Factor in the cost of birthdays treats and special occasions when you’re preparing a budget and give yourself some flexibility. A realistic savings plan is more likely to be successful than one that’s too strict.

5.  You Save The Same Amount

If you save the same amount, despite your income increasing, then you’re missing out on the chance to boost your capital. If you save 10% of your income now, be sure to maintain this when you get a pay rise or promotion. By matching your savings to your income, you should be able to save more as your career progresses.

6.  You’re Not Investing

Investing your money does carry some risk but you don’t have to opt for high-risk investment opportunities. Instead, learn more about low-risk options and consider whether investing could be a viable way of safeguarding your savings and increasing your capital. In some cases, the right investment opportunity could even generate a short-term income too.

Making A Savings Plan

If you’re committed to resetting your finances or you have a financial goal you want to achieve, a savings plan is essential. With the right planning and strategy, you can save more quickly and enjoy a comfortable lifestyle at the same time.

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