Of course you don't want to sabotage your savings! But, perhaps you're accidentally doing some of these things without realizing it, which is keeping your savings from building up as quickly as you'd like.
How to Sabotage Your Savings:
- Don't actually have a Savings Account - If you don't keep your savings separate from your checking account (spending money), it's far more likely that you'll just spend it without thinking about it just because it's there. Set up a separate savings account for your savings (and don't make it too accessible).
- Don't have a Budget - When you have a budget, you know how much money you should have left for savings. If you don't budget, I can guarantee you that you won't have money left at the end of the month to contribute to savings.
- Don't contribute to Your Savings - You'll never build up your savings if you don't actually save any money. Set aside a specific amount to transfer to savings each month as part of your budget (and you can use these tips to help you build a successful budget). Even better - set up an automatic savings transfer each month so you don't even have to think about it. Plus, anytime you get a large amount of money, plan to save a certain percentage rather than just blowing it on fun stuff.
- Spend Your Savings on Anything and Everything - If you don't have a plan for your savings, you'll be more willing to spend it on impulse purchases. Have a specific goal for your savings and have each dollar attached to your goal. We have one savings account and one money market account where we keep our savings and then I have a spreadsheet with line items for each goal (like emergency fund, property taxes, auto insurance, gifts, vacation, etc.). If you don't think you can keep track with a spreadsheet, you can open a separate savings account for each goal.
- Make lots of Impulse Purchases - If you make lots of impulse purchases, you're likely spending the money that you should be contributing to savings. Instead, use these tips to reduce your impulse purchases and put the money into savings instead.
- Spend Money on Credit - If you don't have the money to pay cash for a purchase (or at least pay off your credit card in full at the end of the month), don't buy the item. You'll pay extra money towards high interest rather than contributing to your savings. Plus, you'll eventually have to pay off your debt.
Obviously these tips are a list of things you don't want to do to build a healthy savings. Are one of these things your week point when it comes to savings?
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