Savings are very important to live a healthy life after you retire from your job. Some people have settled goals to be fulfilled after getting retired. However, these goals are totally dependent on your savings. Looking at the current situation of the economy, you might have a rough idea of how expensive living can be after few years. At that time savings will play the most important role as you won’t have any source of income to fulfill your needs.
While trying to save money, people don’t have any idea of what they are getting. Thanks to the internet, paying bills are a lot easier, but have you ever clicked on the additional link to actually view the itemized charges on the bill? At times there are payments that you are making, which have no link or use to you. This is a mistake people make while saving money. Similarly there are few more mistakes that you are making when trying to save money for a healthy future. We have rounded up some of the mistakes for your guidance to have better savings.
You Are Saving For Retirement
It is obvious that you save money to have golden time after retirement. It is actually a mistake that people make today. When you are early in your career, don’t think about saving money today as for your retirement. According to experts, you should rather think of it as creating financial security for you to do what you want in future. You should save money for the future, but your real focus should be on creating sustainable income so that you can do the things planned or would love to do in later years. If you keep the retirement thing in your mind, the savings won’t be enough and there will come a time when your savings will eventually end. Invest on projects that can generate money for you in future.
Paying Smaller Debts First
Plastic money has completely taken over paper money today. People carry cards in their pockets and use them to buy every little thing. You must know that credit cards are interest based. The later you pay your debts, the more the interest will get. The mistake what people make today is paying their smaller debts first, which have low interest rate and keep the higher debts with more interest being charged in them for future. You must pay your higher debts first to avoid huge accumulation of money as the interest charged will be more than smaller debts. Think sensibly and act smartly while paying your debts as your savings would be worthless if your debts keep on increasing.
Not Increasing Your Savings With Your Raise
You might be saving some amount from your paycheck, but what happens when you get a raise? The next mistake what people make is that they spent the extra money on entertainment, vacations or buying something expensive like car or cell phone. Instead of using the extra money on buying things, you should try to save some amount from the extra income and the more raises you get, the more amounts you should save. If you get 3 percent raise, increase your savings percentage by 1 percent and use the remaining 2 percent raise. Future is more important than spending your money on luxuries in the present.
Celebrations After Getting Pay Checks
After receiving pay checks, people get excited of getting their accounts refilled. Financial experts call it impulse purchase. After getting paid, most people start spending the very moment. Going out for dinner or buying new pair of shoes and clothes is what they do and spend their money. It is actually a mistake and should be avoided while you are trying to save money. There are other expenses that are must to be paid like your bills and rent. You should plan out your spending and make it more detailed to have better estimation of amount you have to spend.
Using Piggy Bank To Save Money
Do you still save spare change in a piggy bank? It doesn’t earn you any interest and is not an efficient way to save as you can use the money at anytime you want. Rather than using a piggy bank, you should download the app like blast, which is a better way to save money and you can enjoy interest by playing games like candy crush. The users can set up their online accounts and save incremental amounts in the accounts. It is a lot better than saving in a piggy bank.
These are mistakes that you make when trying to save money for a better future. You should save enough to stand a business of your own in future to keep on earning, which is better than using the stacked money.