Financial expert Rachel Langlois from Cyprus Credit Union talks about the common mistakes people make that sabotages their savings.
- Keeping Savings in One Place
If you have your emergency savings, vacation, down payment, etc. in one account, you may lose track of what you have saved for each. Separate your savings account into subcategories or even at different financial institutions.
- Impulse Shopping
According to a survey from creditcards.com, 5 in 6 Americans concede to making impulse purchases. Making small purchases here and there can really start to add up over time, eating up the money you could be setting aside in savings. If you find yourself wanting to make a non-essential purchase, give yourself a waiting period. At the end of the waiting period, if you decide you don`t need to buy that item, put the money in your savings instead.
- Keeping Checking High
While you want enough funds to avoid overdraw, having too much may lead you to make unnecessary purchases. Keep the minimum amount you need in checking and move everything else into an account that`s harder to access. You should already know how much you need for spending.
- Saving Last
While it`s important to get your bills paid, it`s equally as important to have a savings account. Any amount is worth setting aside. If you have trouble with saving, set up automatic deposits to your account every time you get paid. It may even be easier to have your paycheck deposited straight into your savings and then make transfers when needed.
- Not Including Saving in Budget
Just like any other expense in life, it`s important to include saving in your budgeting. Once you figure out how much you are spending on other items such as mortgage, car, cable, etc. you can determine how much you are able to save. Then, each paycheck, take this money out first to ensure you`re getting your savings.
- No Plan