7 Ways You Sabotage Your Savings Accounts Without You Knowing!

Finances can be a difficult process. Especially for those who have a savings account.   A lot of this comes down to how you act and view money, often without knowing. These seven examples serve to show how money is unknowingly being wasted.

Image courtesy of krapow from Flickr

1)      Living Outside Your Means
One of the most important financial lessons you’ll ever learn is to live within your means. Accepting your limited income and learning to live off of it helps you save money.
However, many people do the opposite, and go over their monthly income. Naturally, this extra money has to come from somewhere, and it’s usually your savings. Do yourself a favour and live below your means, not only will you not lose money, you’ll have some left over to start a savings plan.
2)      Ignoring Debts
While a savings account is an excellent idea, it can often be near useless if you choose to grow this account instead of paying off debts. Various credit products, such as credit cards, often come with exceptionally high interest rates.
The longer you leave this, the larger the debt will become. Eventually this will outgrow the savings. In this case, isn’t it simply better to pay them off whilst you can?

3)      Creating a Financial Safety Net
If you want or need something, borrowing credit should not be the first resort. Instead, you should be focusing on using savings, in the case of a necessity, or extra budgeting and saving to create the funds needed.
4)      Gathering a Second Source Of Income.
If you want to spend more, or simply want to develop an extra source of savings, then you should consider an additional form of income. Many do not, limiting themselves to their income restrictions without considering their options.
A secondary income could be anything from an additional part time job to extra shifts. By finding something flexible enough to work around your main job, you can create extra income that will help you and your savings account.
5)      Not Investing In The Long Term
Investments are meant to be long term procedures, but many people get impatient. But holding out can yield bigger rewards. Quitting as soon as you make a minuscule profit may sound advantageous, but it often struggles to compete with inflation.
Likewise, with your savings account, you need to remember the long term ideals. The longer you save and add to the account, the more the interest you’ll accumulate.
6)      Planning a Retiremen
A lot of people don’t prepare for their retirement. While a state pension can be reliable, you should really look into your other pension options. For example, your company pension plan might be more beneficial if you pay more in. By considering these options, you can receive more money in your later years. This in turn stops you eating into your savings.
7)      Not Checking Your Options
You’re current bank or utility providers might offer a good deal now, but a lot of companies use these low offers to deceive customers, increasing the prices with each renewal. By taking the time to compare savings accounts online, you can quickly get the best deal. You can then use this information with your current bank, or consider switching. Either way, this information should help you get a better deal if you take the time and effort to use it.

Author | This post was inspired by Fair Investment Company – compare fixed rate bonds, savings accounts and instant access savings accounts to find out more.