Saving money is one of the best financial decisions one can make. Nothing will teach you the value of the dollar more than saving money. Putting money into a savings account is a good idea if you are trying to save up for a big purchase like an automobile or house. In addition, saving money can give you a financial cushion and help you develop a useful emergency fund.
While computers and online banking software has made it easier than ever to put money into a savings account, there are still some things you should avoid when it comes to saving money. Since most of you already know the right way to save money, we will talk about some money mistakes.
Here are 4 wrong ways to save money
1. Putting more than you can in your savings then making withdrawals.
The point of a savings account is to “save” your money. I’ll never understand why people put money into a savings account just to make withdrawals to buy unnecessary items. The best way to utilize a savings account is to make regular deposits, leave the money alone and let it gain interest. If you keep taking money out of your account, your savings will be nullified. It is a wise decision to budget your money so you don’t need to delve into your savings unless for an emergency. You should also read “4 Tips For Breaking Bad Spending Habits” to help you work on your budget and spending.
2. Buying a new car when your old one works fine.
Not having a car payment is a good thing. It can save you $300, $400, up to $500 a month or more. So once you pay off your car and it still runs well, don’t rush out to buy a new one and use up that money. This is not a smart way to save money.
3. Not shopping for car and home insurance at least once a year.
You see all the funny TV commercials for a reason – there is so much competition on auto and home insurance. It is smart to shop around at least once a year and compare your rates. If you have been with the same insurance company for over 5 years you may be paying too much. Especially if you have no tickets and accidents. This can be extra money you can put into your savings or to pay down debts.
4. Paying full price.
With all the coupon sites and daily deal sites available, there is no reason to keep paying full price for the products and services you use all the time. This is an easy way to save money on purchases you were going to make anyway. You can save 50% on hotels, haircuts, massages, oil changes, etc.
Now you know 4 wrong ways to save money. Avoid these habits and put more money in your pocket each month. This will allow you to pay down your debts faster.