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Savings Slip-Ups: 7 Mistakes People Make With Their Savings

March 9th, 2025 Posted in Money Tips
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Having savings is always handy. But there’s a right way and a wrong way to save. This post takes a look at a few common savings mistakes to avoid.

Savings Slip-Ups: 7 Mistakes People Make With Their Savings - hand putting coin into a piggy bank

Photo by Joslyn Pickens:

Not setting clear savings goals

First, it’s important to consider what you’re saving for. Without a clear savings goal, you’re likely to be more tempted to dip into your savings for all kinds of reasons. Setting strict purposes for your savings accounts can help you to ensure that your money is put to good use. This could include setting aside some savings for emergencies, saving up for a holiday or saving up for a deposit on a house.

Putting it all in one account

Having all your savings in one account is not recommended. Consider setting up savings accounts for different purposes – such as one for emergencies and one for personal luxuries such as a hot tub. This could prevent you from draining your savings to buy a hot tub without leaving anything left for emergencies. You may also find that different savings accounts are better suited to different purposes. 

Saving in too many places

It’s also possible to set up too many different savings accounts for too many different purposes. The more spread out your savings are, the less interest you’ll make on each savings pot. You also won’t be able to contribute as much to each savings account, leading to slower growth of savings. A savings account for emergencies, a savings account for a primary personal goal and a savings account for secondary goals is all you need. 

Settling for a low interest account

A lot of people don’t take the time to shop around when choosing a savings account. Some banks could pay much higher interest than others. It’s important to occasionally compare different banks and make sure that you’re earning as much interest as you can. 

Ignoring withdrawal penalties

Some high interest savings accounts require you to make a compromise – often including withdrawal penalties such as paying you no interest for a month if you take money out or only allowing you to withdraw a certain amount per month. Factor these in when choosing a savings account. 

Not seeking out professional advice

Putting your money into a savings account may not always be the best way to manage your savings. There could be other options to consider like bonds or stocks. By talking to a financial advisor, you can work out the best way to manage your savings based on your investment goals. Try to seek out independent advice rather than talking to someone at a bank. 

Not topping up your savings

It’s important that you’re constantly contributing to your savings – even if it’s just a small amount each month. Too many people who come into money quickly fritter it away without putting anything back into it. Similarly, many people stop saving once they’ve reached a certain goal (such as buying a house) – continuing to save could allow you to chase other goals without having to rely on borrowing (such as home improvements). 

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Eliminating Financial Stress In The Future

March 23rd, 2020 Posted in Money Tips
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If ever there was a time that demonstrated the uncertainty and unpredictability of life, it’s now. Even if you’re young and you’ve got a stable income, it’s beneficial to start planning now to reduce financial stress in the future. Here are some steps you can take.

Eliminating Financial Stress In The Future - savings and money growth image

Saving

With many people facing a very uncertain few months ahead, the benefits of saving cannot be underestimated. Budgeting and putting money aside can help to prevent overspending and create a nest-egg. If you don’t already save money on a monthly basis, it’s a good idea to set up a direct debit on your payday. If you can afford to put even a small amount of cash aside each month, this will help to create a more stable, secure future. Use budgeting techniques or apps to work out how much disposable income you have in an average month and save whatever you can. If you transfer a lump sum as soon as you get paid, this will enable you to plan the rest of the month and reduce non-essential spending. 

Retirement planning

If you don’t plan to retire for another 30 years or so, you might not think that you need to worry about pensions or investments at the moment. The truth is that the sooner you put plans in place, the better. If you don’t have a pension already, or you’re unsure whether your current pension is the best option for you, it’s worth seeking advice. If you’ve already taken out a pension, and you’re concerned that you have been misled, it is wise to investigate SIPP pension claims. To avoid finding yourself in this situation, if you haven’t already got a pension, research before you sign on any dotted lines and don’t hesitate to ask for help if you’re not sure which product is best for you. 

Creating an emergency fund

You only have to read the newspapers or listen to the headlines to see that a bolt out of the blue can cause financial problems for anyone. Even when life seems to be rosy, nobody knows what is around the corner. Having an emergency fund will provide peace of mind and financial support if you do find yourself in a difficult situation. An SOS fund could help to cover you if your hours were cut at work, you lost your job, you had an accident, or your home or car needed urgent repairs. Start saving on a regular basis and look out for savings accounts that offer high interest rates or the ability to save on tax, for example, an ISA. It’s also worth ensuring that you have insurance policies to protect your home, car and family. If you have insurance, this can cover unexpected costs and reduce anxiety linked to money problems. 

Nobody has a crystal ball, and you never know what the future holds. Taking action to manage your finances and start saving, and planning for the future now will be beneficial in years to come. Try and save more each month, take advice from experts on board and plan for your retirement. 

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Managing Your Money – Small Beginnings, Big Changes

August 20th, 2019 Posted in Money Tips
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The concept is straightforward enough, you want to save a little each month and build up a fund that will be there for you to tap into in case of an emergency or that you can grow in order to get that house renovation done, a new car or the holiday of a lifetime.

But while, yes, it seems straightforward it appears that for some of us those good intentions of saving for the not-so-distant future are hard to turn into reality. But what is it that’s holding us back? What prevents us from saving for the things in life we really want? Perhaps it’s a lack of organisation, a problem that exists around our monthly budget or the fact that we always seem to find something better to spend our money on. 

If you’re looking to make some changes in the way you manage money then you’ve come to the right place. In this article, we’re taking a look at how you can get yourself organised in your monthly outgoings and manage to start saving for those big things in life that seem so far out of your reach just now.

Managing Your Money - Small Beginnings, Big Changes - coins growing in jars image
Image by Nattanan Kanchanaprat from Pixabay

The Dreaded Spreadsheet

You knew it would come to this, but if the idea of inputting all your incomings and outgoings into a spreadsheet bores you to tears or fills you with dread, then there are some far more user-friendly options out there to help keep track of your money.

We’re talking, of course, about apps and one of the best out there at the moment is Mint. You’ll find it helps you to set a monthly budget, see exactly where your money’s being spent and with a free sign-up, it’s far more satisfying than pouring over that Excel spreadsheet each month.

But yes, despite the more modern approach you are still tracking your finances and this is exactly where you need to start. Give yourself a long-term goal and simply spend the first two or three months getting used to tracking your money so you can figure out some of your spending patterns. You don’t need to change anything at this stage, this is the data gathering part of the process.

Analysis

When you do go back and take a look at where your money goes, you’ll begin to see some patterns emerging. Perhaps you spend the majority of your money at the beginning of the month and, what with your bills leaving at the same time, you’re left with very little spare cash for the last two weeks before payday.

You’ll also see what you’re spending your money on. That latte bought on your way to work every morning has, over three months, mounted up to quite a cost. This kind of analysis is worth going through to help you make some judgements and changes over how you ration your budget.

Finally, you’ll also be able to see all the direct debits and standing orders that are attached to your account. That insurance for a long ago expired laptop that still goes out or the expensive gym membership that never gets used, it’s a good time to make some changes and to see if there are any cancellations that might help you out. It will also give you the opportunity to shift around the dates that direct debits leave your account if that’s going to help you plan a little better.

Prioritise

Once you’ve analysed your spending, it’s time for the action part of the plan to get started. You’ll need to get to the point where you start prioritising. This might mean that you ditch the latte habit completely or set aside a budget for it where that weekly purchase becomes a once or twice a week treat instead.

You might think about dividing your budget up into several pots, including bills, essentials such as food and entertainment, including socialising and of course luxuries such as that latte.

Once you’ve found a natural rhythm for your outgoings, you’ll be in a great position to then add savings to that list.

What to Spend Your Money On

Once your savings are on their way then you’ll be able to think about what you’re saving for. We can’t recommend enough clearing your debts as a first priority. Not only will it free up your money in the long term, it will also help to improve your credit score. If you’ve been asking yourself How can improve my credit score? Then this is the very best way to make those changes.

Get those debts paid down and enjoy greater financial freedom. What you’re saving for is, of course, entirely down to you, as is the amount you’re able to put aside each month. Some experts believe in following the 50/30/20 rule where 20% of your income will go into your savings pot, 50% on the necessities and 30% on discretionary items.

If this works for you and if you have a fixed monthly income, then this can be a great method. Another equally as valid, though slightly more flexible approach is to set up a sweeper account. In this version anything that’s left in your account the day before payday or at a date you specify is swept into your savings account. It allows for those unexpected expenses, like a broken boiler and recognises that some months the savings are going to be minimal while other months there might be a lot more.

However you save and whatever you’re saving for is your choice but your active decision to begin managing money should be applauded. The difference you’ll make to your account with regular saving will seem minimal at first but you’ll be surprised at how quickly that small pot can grow. The sense of satisfaction, not to mention security you’ll feel is worth the effort of getting your accounts in order. Download an app, go through the process and add an extra layer of security to your finances.

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The Importance of a Rainy Day Fund

May 8th, 2019 Posted in Money Tips
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What would happen if you lost your job tomorrow? Would you have enough money to cover all of your expenses without running up extreme credit card debt? It is very important to have an emergency fund set aside for life’s unexpected events. There are many reasons why you should have a rainy day fund, and there are ways you can ensure you’re able to set one up that is sufficient for your specific needs. Let’s discuss some of the ways you can manage your money properly so you are able to allocate money to your rainy day fund!

The Importance of a Rainy Day Fund - saving money image

Losing your job is only one of the many reasons you need to have back up cash. You can also have expensive health or dental issues, or a major car repair. It’s essential that you have money set aside for these occasions. It is recommended that you have at least three to six months worth or income set aside in this fund. If you own a home, a recommended emergency fund of 1% to 3% of the total home value is encouraged to cover any unforeseen repairs which may arise. You can check out this handy calculator to get a more precise amount!

Once you have calculated your monthly expenses, then you need to figure out how will you will actually save up the money to put into your rainy day fund. Take a look at your current budget to see if there are areas where you are spending in excess. If you are able to cut out some excessive spending like dining out, or buying daily coffees, you might be well on your way to meeting your fund’s goal. There are also apps that offer automatic savings which make it very easy to ensure that you are setting aside a portion of each paycheck towards your emergency fund.

There are many other ways which can make your emergency fund goal a reality. You could sell items which you no longer need. The average garage sale could net you around 750 dollars! Getting a side hustle is another great way to bring in extra income. Some common side gigs include, freelance writing, graphic design, virtual assistant, bookkeeping, and accounting services. Check out this article for some more side hustle ideas!

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Getting Financially Stable: Everything You Need to Know About Taking Out a Loan

April 18th, 2019 Posted in Credit and Debt, Money Tips
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Being optimistic about your finances is only natural. Most people have high hopes concerning their job prospects, lifelong earning capacity and financial management skills. But, reality might have another plan.

Getting Financially Stable: Everything You Need to Know About Taking Out a Loan - financially stable image

What Is Financial Stability?

 Financial stability is both an objective and subjective quality. The objective standard is having an income that is higher than your expenses. You must make more money than you spend.

But, the subjective character is based on your financial status. Most people will admit that rich people have a different life style than others. For many of them, they can coast for a while before the day of reckoning arrives.

But inevitably, it will arrive. Everyone pays the piper. So, even though the wealthy have a higher income, they also must develop wise management skills. We will discuss a few of these.

Make a Budget

 Musicians practice, athletes practice … pretty much anyone who wants to succeed practices and prepares a plan. How can you control your expenses, when you don’t even know what your credits and debits are? You need to start by making a budget.

Some people don’t want to face financial reality. They want to believe that they are wealthier than they are. We see this a lot with athletes and celebrities. When their salad days are over, they might file for bankruptcy.

If you fail to plan, you plan to fail. = Benjamin Franklin.

Create a budget. If you are continually dipping into your savings, then you know you are not making ends meet. And, something that cannot go on forever, will not go on forever.

Write down your expenses and income. Then, see what your surplus or deficit is. Decide how you are going to make up that deficit.

You might try to add more hours at work. Or, you might consider taking out a personal loan. Saving money requires having higher income than expenses.

Balance Your Cheque Book

 Once you have a planned budget, see how you are doing each month. Balance your cheque book. Many people assume that bankers are never wrong. But, they do make mistakes.

After balancing your cheque book, you can identify any errors made by your bank. This also gives you a better understanding of your spending habits. You need to know how you spend money before you can improve your money-spending habits.

Count Pennies

 Remember the parable of the grasshopper and the ant. The grasshopper liked to visit the grocery store in the middle of the week and throw large parties. He had a great bar-be-cue, but didn’t produce anything of note.

While, grasshopper partied, ant was working hard, storing up food for winter. Grasshopper wondered why ant worked so hard. Ant told him that when winter arrived, those who stored away wealth would survive. Eventually, winter arrived and ant had plenty of food stored up while grasshopper starved.

How will you reap, when you have not sown? 

Those who save money, count their pennies. If you need help calculating your pennies, then you can use the Acorns App. Financial management has never been easier.

This money management app helps you earn found money, grow your knowledge, invest for your future and spend smarter. It is like having a financial assistant with you all day long. Sometimes, people need a little nudge to improve their saving habits.

Cut Corners

Paying off debt requires both a physical and spiritual commitment. Physically, if you don’t have enough credit, then you need to reduce your debt. You need to cut corners.

Enjoy some home cooking and reduce your visits to five-star restaurants. You might want to watch an old movie on date night. Reduce your expenditures to create a better threshold for your budget.

Find New Income Sources

 Sometimes, debtors need a little financial boost to help them regain their composure. When you are priming a pump, you introduce a similar liquid to draw out the liquid. Find new income sources to increase your cash flow.

After you learn more about personal loans, you can find the best financing means. Use the new funds to pay off the bills with the highest interest rates. Compound interest can quickly drag you underwater, like a drowning swimmer.

Create Rainy Day Fund

 You wear a seat belt just in case you get in an accident. A rainy day fund can help you overcome little glitches in the budgeting process. For example, your rent is probably due the beginning of the month, while your pay cheque arrives every two weeks. Sometimes, these two periods of time don’t mesh perfectly.

Instead of incurring late fees, create an emergency spare cash fund. You might even include a full month’s rent. This ensures that you are always on time.

Landlords and bankers expect you to pay your bills on time. They have a very fine-tuned system that will deposit the funds into their bank accounts immediately. There is a “Domino Effect” when they’re not paid – managers ask where the money is.

A rainy day fund smooths over many rough edges. It can be used to keep everyone happy. Toss a $20 therein when you get paid.

Healthy Financial Management Skills

Changing bad financial management habits can take some time. Psychologists believe that the development of good skills might take at least two weeks of constant repetition. Send yourself an alert from your smart phone, urging you to save more every single day.

After two weeks, there is the hope that this new habit will be well-ingrained. Use a multi-dimensional strategy for regaining financial stability: make a budget, cut costs and find new income sources. Develop healthy financial management skills to pay off your debt. Then, you can sleep better at night.

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