Saving money indeed takes some skill and organization. However, sometimes people try too hard, and that results in wasting even more money. Creating and maintaining your budget is pretty easy – if you avoid certain mistakes. These are pretty common, as people hurt their budget without even knowing it. This guide will help you do this right – learn what mistakes people make when trying to save money, so you can avoid them and stash a lot more than you thought was possible.
Saving without a specific goal
If you save money just for the sake of saving, the lack of purpose will likely discourage you. You’ll end up unmotivated, and you might even waste your savings after you get tired of it all. Instead, consider the saving process as a road trip. You have point A and point B - your goal is to reach the destination. This can be a small or big amount. You can save on all sorts of things such as clothes, a new car, a bike, or a house. You’ll be able to achieve certain things in two months and some of them in a couple of years – just have a goal and stick to it.
Having no financial plan
If you think that making a budget is unnecessary – this is where you’re wrong. Not devising a budget is certainly one of the mistakes people make when trying to save money. Following a specific plan will help you avoid reckless and unnecessary spending and thus reach some of your goals faster. There are several ways you do this, so be sure to research some budgeting methods so you can choose the one that’s best for you.
Caption: If you have a savings plan, you can reach your goal much faster.
Alt-tag: A person putting a coin in a piggy bank
Not preparing for big events
There are several events in our lives we need to be mentally but also financially prepared for. Home renovations, weddings, births, and relocations are some of them. For each of these, be sure to organize your schedule, as well as your budget months in advance. The experience of the TB Moving and Storage team shows it’s necessary to start moving preparations at least eight weeks in advance. This means you should start saving for the move a couple of months before the big day.
Expecting a magical shortcut
Saving is a process. People who think this can be done quickly – are mistaken. Saving takes time and requires some lifestyle changes and new habits. There’s no quick fix when it comes to spending less. Revising your spending habits and introducing some new ones is what you need to do. Committing to these changes will give you better results in the long run.
Mistaking saving and being cheap
You’ll indeed have to spend less to save, but don’t mistake it for being cheap. One of the mistakes people make when trying to save money is reducing the quality of their lives to reach their financial goals faster. This is not effective for various reasons. Here are some examples:
Buying cheap food is not the way to healthy living. Even though you can cut down on restaurant visits, never buy low-quality ingredients just because of their price. It’s better to stock up on high-quality items you find on sale.
Cheap clothes and seasonal sales might be tempting, but these clothes will not last long. You’ll end up spending more as you will need to buy new ones soon. It’s better to revise your wardrobe and pick items you need. This way, you’ll be able to buy more high-quality pieces, wear them longer and never look cheap.
Nothing says you’re a cheapskate like a bad, cheap gift. Giving cheap gifts to your friends doesn’t need to be an option, even if you’re trying to save. Get creative with handmade gifts or some unique gestures that show you care.
Trying to DIY everything can lead to damage and injuries – DIY gifts and projects are fine but don’t try to do everything yourself. For example, it’s always better to hire a pro to help you with home renovation. Sometimes, supplies and the time you need to do the work are simply not worth it. Also, when it comes to moving, never choose a DIY solution. Never move alone because skilled pros should handle your belongings. If you want to avoid injuries and damage, that is.
Caption: Sales are tempting, but be careful with what you buy.
Skipping regular maintenance
Many items in our homes, including ourselves, need regular maintenance to stay in good condition. Therefore, skipping regular maintenance of things such as your car, your teeth, or anything similar will only lead to additional costs in the future. Maintenance serves to avoid damage and higher expenses, so it shouldn’t be something to save on. Don’t risk having unpleasant surprises in the future if you can prevent them today.
Not using a good savings account
Saving money and letting it sit around is not helpful and will not lead you to your goals. It’s better to pick a high yield savings account and slowly start making money while saving.
Caption: Not letting the money grow is also one of the mistakes people make when trying to save money.
Underestimating the emergency fund
Having a separate account with easy access to your savings is essential when you need cash for something unexpected. Things happen – car repairs, house maintenance, etc. You need to have some money for unforeseen expenses. Build your emergency fund over time – start with smaller goals, automate your savings and let that fund grow.
Not enjoying life
One of the most significant mistakes people make when trying to save money is they stop enjoying their lives. It’s true that saving includes cutting down some costs and introducing good spending habits. However, this doesn’t mean you should give up on everything you enjoy because it’s not a bare necessity. Wise saving methods will ensure you spend money on what you care about and need and avoid unnecessary costs. We only live once, so when you try to save – don’t overdo it!