Even if you’re a good saver and have answered ‘yes’ to the above two questions, you may be committing some money mistakes maybe unknowingly. Avoiding these mistakes might help you save more or manage your finances in a better way.
Let’s check out what mistakes you might be making:
1 Linking your savings account with your checking account
You may think it’s a good idea and easy to transfer funds.
But, think once - What will happen if you accidentally overdraw your checking account? The bank will automatically debit from your savings account.
In fact, many financial advisers are of the view that it’s better not to use any ATM card for your savings account. This way, your savings will remain intact.
Making it difficult to access money will help you save more.
2 Saving what you’re left with
This is one of the most common money mistakes good savers either don’t know or don’t pay heed to.
However, that doesn’t mean that you decide to save 60% or 70% of your income even if your income is not that much. You should decide to save a decent amount and at the same time, it should be a figure, which is not much difficult to save every month.
So, decide a figure and set aside that amount just after you receive your paycheck and with the remaining dollars, plan your fixed and variable expenses, along with allotting money for yourself and your family.
3 Saving a decent amount and thinking your job is done
This is another common money mistake many good savers don’t know.
Practically, it is of no use if you save a significant amount and just sit with the money.
If required, consult a good financial adviser who can guide you well about this.
4 Not taking into account your small cash
Do you think that your job is done if you budget your paycheck or consider lump sum amount and ignore the small cash?
If you’ve answered ‘yes’, then you’re making a big mistake my dear!
You can even try to increase the amount of your emergency savings.
5 Thinking that your credit rating is good
When was the last time you checked your credit report and score? Don’t remember?
Are you sure you’re still maintaining a good credit and are having a good score?
So, pull your credit reports periodically at least from the 3 major bureaus and check out whether or not they’re correct. If any error, dispute it without delay.
Make a note of things you don’t understand and get it clarified.
6 Not paying heed to make a will
If your family is dependent on your income, it’s your responsibility to make a will. Even if you’re not the only breadwinner, you should make a will.
A research conducted by Money magazine revealed that about 57% Americans don’t have a will. This figure includes 65% of parents who have children under 18.
So, think and make a good estate planning so that you can decide all yourself.
7 Do not value the importance of insurance policies
Even if you save well, you need to have insurance policies to guard your finances in times of emergency situations.
At least purchase adequate coverage of home insurance, life insurance, health insurance and auto insurance.
This will help you secure your financial future and you’ll be stress-free.
8 Last but not the least...
I would advise you make a note of every spending in your smartphone or keep a small diary with you.
Keep an account even if it’s as little as $5. This will help you cut down unnecessary expenses if you’re making one. This will also help you plan a suitable budget and attain your financial goals within the time you want to.
So, did you find anything interesting?
Do share your thoughts…