I am all for new ways to save money and make the income you do have stretch, but I also think there are some pitfalls we all need to watch out for as well.
“What? You say it’s possible to make mistakes in saving money????
Unfortunately yes. The good news is, we can learn from the mistakes of others and apply them to our own situations. Following is a list of six money saving mistakes you don’t want to make.
1. Be Careful with Coupons
While it’s a great money saver to take advantage of sales and use coupons where you can, serious “couponing” is not necessarily a savings boon, say sources. For one thing, you aren’t going to find coupons for some of the healthiest foods, produce. That means if you rely on coupons only you may end up in poor health, which in turn means more money spent on medicines, sick time away from work, and so forth. Hardly a money saver. PLUS people tend to forget that coupons are great if it’s money off something you already use. Oftentimes brands use coupons to entice consumers to buy their new products, and it may be items your family doesn’t need at all.
2. Budgeting for Savings
Too many people make the mistake of saving if the opportunity presents itself, or if money is just sort of “left over.” Big hint: money rarely just presents itself! Saving money needs to be a deliberate, thoughtful process and budgeting in a certain amount to save each month is a wise approach.
3. Restricted Accessibility
Savings accounts vary in their accessibility, but having one like a CD where you are heavily penalized for early withdrawal may be a mistake. If you do have money tied up in something like this, some experts agree that it’s a good idea to start another savings account on the side just to have money that is “liquid.” Basically this means a pool of money that you can actually get at if you need to without penalty.
4. Jumping on the Investment Bandwagon
There are two important points to keep in mind regarding investment opportunities: #1 – If you don’t understand it, avoid it; and #2 – If it sounds too good to be true, it is. As for #1, many investment fraudsters will be unclear in their explanation of the deal, causing confusion and sounding so technical that you figure they must know best. True investments are easy to understand; saving money should be simple. As for #2, don’t fall for the notion of “risk-free” investments with “guaranteed returns.”
5. The Long Term
Don’t make the mistake of putting your money where “introductory rates” sound good. Nothing lasts forever, and after a year or so, those rates will change. Some promotional deals are excellent, but the key is still to do your homework. Find out what the promotional deal really involves in the long run. For instance, a promotional mortgage rate that’s rock-bottom low may sound great, but only if it’s fixed-rate would it be worth it.
6. Random Saving
It’s good to have savings goals, but it can be a mistake to save randomly like I mentioned in #2. Saving money without a goal makes it waaayyyy too easy to “dip into” your savings for frivolous reasons. Having concrete goals (a trip to Disney, pay off your house, a day at the spa) can help you to keep your hands off the savings unless it’s really necessary.
What sort of money saving mistakes have you made?