Most people work hard to save money. There are several reasons that people save money. Some are saving for a car, some are saving to buy a house, some are saving for college. There are also some people who are trying to save so that they can live comfortably when they retire. Whatever the reason a person is saving money, they need to save smart. There are many people who have been saving money all wrong and they wonder why they can’t seem to save enough. If you are trying to save money, you should watch for the mistakes that people commonly make.
You Have Too Many Bank Accounts
One reason you may not be able to save money is because your money is spread out in too many places. If you have several accounts, it can be difficult to keep track of everything If you don’t see all of your savings in one spot, it can make it easy to lose track of your goals. If you are completely opposed to consolidating, you should use money saving software so that you always know how much money you have and where it is going.
You’re Transferring Your Funds On Your Own
One of the biggest mistakes that people make when they are trying to save money, is moving their own funds each week. It is very easy to say that you are going to transfer $50 from your checking account to your savings account each month, however, that doesn’t mean that you will always do it. One week you may forget. Another week you could overspend and then there just isn’t enough money to transfer to your savings account. When you have your bank automatically transfer the funds from your checking to your savings each week, there is no risk of forgetting to move your money or running out of cash before you have a chance to. An even better way to save is to enroll in a 401K plan with your employer. This way, the money won’t ever enter into your account for you to spend it. It is a great way to save and reach your goals.
Wrong State of Mind Regarding Spending
Even though you are trying to save money, you will need to spend money on certain things. Many people who are trying to save money make an agreement with themselves that they won’t spend more than $20 on a non-essential item. The problem with this is that people in this state of mind keep spending $20 here and $20 there. Before they know it, they spent hundreds of dollars. When you are trying to save, you can buy non-essential items once in a while, however, you need to track your spending. If you want to be sure that you don’t overspend, set a limit for non-essential items and take it out of the bank. When you pay for your items in cash, you will always know how much money you have to spend.
You Aren’t Trying Hard Enough to Save Money
Saving money takes a lot of work. There are plenty of ways that you can cut costs if you really try. For example, you can start shopping around to find an auto insurance company with lower rates than yours. You may be able to find a company that can save you hundreds of dollars each year. You could be paying too much money for your cable or your cell phone, and if you do the research, you might be able to find a company with cheaper rates.
Even if switching would result in a bill that is $5 cheaper each month, that is still an additional $60 each year. You can even save money on your credit card bills if you find one with a lower rate and transfer your balance. This could save your hundreds, possibly thousands of dollars each year. If you are able to find ways to save money on your necessities, you will be able to put more money away into your savings. When you are going grocery shopping, start clipping coupons and buying the store brand rather than the name brand.
If you need to buy clothing or furniture, you can find gently used items at the thrift store for up to half the cost of buying these items brand new. Trying to cut costs can be time-consuming, however, it can really pay off in the long run. If you really want to save, you need to be prepared to cut the necessary costs. When you see how much money you will save at the end of the year, it will all be worth it.
You’re Eating Out Too Often
One of the biggest mistakes that people make when they are trying to save money is eating out. Some people go to the deli down the street for their office each day for lunch. They say that they have to eat so it is a necessary expense. Most people stop at their local coffee shop on their way to work because they need their caffeine every morning. Eating out every day, even stopping for a cup of coffee can cost you thousands of dollars each year.
This is all money that you could be saving. Rather than stopping to buy a coffee, buy a travel mug and make your coffee at home. Rather than buying a sandwich at a local deli, you can make a sandwich at home before work and eat it at your desk. If you don’t feel like cooking one night, avoid the temptation to eat out. Stock up on frozen meals for the nights that you are just too tired to cook. It may not be as enjoyable to live this way, however, it can put up to $5,000 more each on into your savings account.
If you have been trying to save but it doesn’t seem to be working, it could be because you don’t know how to save. It could also be because you are not trying hard enough to save. The sooner your are able to recognize your poor saving habits and your poor spending habits, the sooner you will start seeing your savings account grow.