Trying to save money? You might be going about it the wrong way. Here are the biggest money saving mistakes you can make.
Starting too late
It’s never too late to start saving money, but if you want to make the most out of your income, ideally you should start saving when you get your first job. Obviously, you can’t turn back the clock to when you got your first job at McDonald’s at 15, but the principle rings true: the best time to start saving is now. Stop putting it off and make a plan to get your finances on track.
Not paying yourself first
When cash hits your bank every month, the first thing you should do is transfer the money you want to save into your savings account. It’s simply too big a temptation to keep it in your spending account. Trust me, you’ll find a way to spend it all by the end of the month. So pay yourself first!
Saving less than 5% of your income
If you’re saving for something big, like retirement, you’ll need to bump up your savings to at least 5% of your current salary to make a substantial contribution. Try saving at least 10% (or even 20%!) of your salary – you’ll love seeing the money accumulate quickly! Over the years, compound interest will also help to build up your cash.
Not having a separate savings account
It is extremely important to separate your savings and spending accounts. If you don’t have separate accounts, stop what you’re doing and go to your bank’s website straight away and open a savings account! Try and get one with a high interest rate – it always feels good to receive free money!
What money saving mistakes have you made in the past? Let me know in the comments below.