Saving money is not easy. It requires discipline and effort. But even if you approached the issue responsibly, there is a risk of making a mistake. Surely you come up with something more clever than keep money under the mattress, but there are always a better way. Here are five common mistakes and expert advice for their elimination.
If you have already started to save money, congratulations – this is a reasonable step towards a secure future. Ideally, your cash “safety cushion” should be enough for six months of life without financial revenues. Even if every month you make a profit and increase their savings, it does not mean that your strategy is ideal. David Blaylock, a financial planner, analyzed the common strategies for the retention of funds and gave some suggestions to improve them.
Strategy number 1. Postpones what remains
So, you pay your monthly bills, maybe spend a little entertainment, and then all that remains is sent to a bank account. Knowing that you have, in principle, have the money, you can spend more than they should, and then spend money destined for accumulation. In addition, it is difficult to put yourself on the accumulation of a specific goal, because you can never tell for sure how much will be left after all expenses. Instead, you can try another way. Most first bill, which must be paid after wages – this is your savings account. Make it your rule and are perceived as mandatory and the most important part of the benefits (of course, if you have enough money to pay for all other accounts) . How to do itcreates an automatic transfer of money from his bank card to the savings account at the beginning of each month or received payment. If you just put this automatic transfer of money and forget about it, after some time, the number of accumulated much will surprise you.
Strategy number 2. I transfer money to the savings account
So you regularly set aside money – it’s wonderful. Yes, and a savings account with a plastic card – it’s very convenient. But there are disadvantages. If you run out of money, you risk withdraw their savings or even spend it on an unexpected but very welcome package. And, most likely, you do this, because is very easy to withdraw money: they are always within reach, you do not even need to go to the bank, it suffices to use the ATM. Instead, try to open a bank deposit for 6 months or a year. So you will not spend the money for storage. Just do not invest all. Some amount of leave on a regular saving account for emergencies.
Strategy number 3. All my savings are in one account
When you have only one savings account, it seems that money is piling up on it quickly and they have enough for all. If you save up for just one thing, such as an apartment or a vacation, it’s all right. But if you have several goals, one bank account is difficult to process and you do not see concrete progress. You harder to understand what is enough money, and what will have to wait. In the end, it turns out, spending savings, for example, on vacation, you do not leave anything on the new machine. Better have multiple accounts, each of which will be dedicated to a specific purpose, such as “home”, “holiday”, “education the child. “ So it will be much easier to calculate their finances and see real progress.
Strategy number 4. Immediately I save large sums of money when I can
Some people do not save money on a regular basis, and keep large sums immediately when fortune falls. With this method of accumulating wealth and alternate feelings of guilt. Last – when you have to take money out of their savings.Frustrated by this may even discourage the desire to save money ever again. It is best to set yourself goals and strive to accumulate them. Identify the specific amount of money that must be set aside each month. If you think that it can be increased without compromising the quality of life, do it. But!Contributions must remain consistent and uniform.
Strategy number 5. I put everything I can
Despite the need to have savings, you should not get too hung up on this and indulge in pleasures. They help us stay happy and maintain mental health.On the other hand, if you did not have a month in which you could make money in an “emergency fund” set aside all other payments and fun until you can do it.When your six-month “emergency fund” will be replenished, Blaylock advises to change strategy. As small cash savings bring little money should think about more long-term investments at good interest. Successful savings!