Money Matters

3 Reasons Why You’re Terrible At Saving Money

You’re probably fed up with everybody telling you how important it is to save money. Everybody knows that it’s important to save money if you’re going to have a secure financial future, but it’s not as easy as that. Some people seem to be able to save loads of money every month while you’re there struggling to put anything aside at all. It might be because those people earn more money than you, or live in a cheaper city. But the harsh truth is that they’ve probably got better financial habits than you and they’re not making these simple mistakes.

Using The Wrong Savings Account

 

Picking the right savings account is the first step toward financial security. People don’t think that it’s that hard, just get the one with the highest interest rate. That is important but there’s a lot more to it than that. A savings account that you can access easily isn’t the best idea if you aren’t good at saving. You’ll start with the best intentions on payday and put a load of money aside. But in the back of your mind, you always know that it’s there so you’ll spend the rest of your cash then take out your savings and spend all of that as well. If you get a savings account that you can’t easily access, you’ll be forced to live within your means and you won’t be able to spend anything that you’ve saved.

Online savings accounts are a good option as well. You can often get better deals than you would if you went into the bank and opened one. Check out this online savings account review by the Motley Fool to see what deals are available. Online savings accounts tend to have lower fees as well so you’ll have more money to save.

Having An Irregular Paycheck

Saving is actually quite simple when you’ve got a regular paycheck every month, you can work out how much you can afford to save and put it aside every month. But if you’re a freelancer and you don’t have a regular paycheck, things are a bit harder. The mistake here isn’t having an irregular paycheck, it’s thinking that you can’t save if you do. The thing is, you can save if you’ve got an irregular paycheck, it’s just a little harder. You’ve got to remember that saving something is better than nothing, even if it’s just a tiny amount so just put aside whatever you can afford that month.

Not Knowing The Difference Between Wants And Needs

Before you can start saving, you need to work out all of your expenses and see what’s left over afterwards. It might be the case that, after paying for all of your essentials, you don’t have anything left over and you don’t think that you can afford to save. In rare cases, that’s true. But most of the time, you’re confusing wants with needs. Go through your budget again and see whether everything on there is actually an essential or not. You’ll probably find that you can find a bit of extra cash to put in your savings.

Even if you’re not earning that much, you can almost always afford to save money if you avoid these mistakes.

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