5 common savings mistakes to avoid
Many parents do put in effort to save money, but some end up sabotaging their own efforts by making common savings mistakes. Since it's less costly to learn from the mistakes of others then our own, here are some mistakes to avoid when saving money.
It’s nice to be spontaneous and impulsive at times, but not everything can be put off till tomorrow. If you and your spouse want to have another child in a few years, start putting aside money as soon as possible.
If you know the family car needs to be replaced within the next decade, commit to an achievable savings goal with a reasonable budget in mind.
This goes the same for non-essentials like a family holiday. Want to take the kids to see the Pyramids of Giza? Instead of booking a holiday impulsively, implement a savings plan and stick to it.
As long as you and your spouse have a steady income, there’s no reason for not setting aside money for future needs.
Not being prepared for the unexpected
Besides a normal savings account, families should also put aside money for emergency situations. It’s best not to rely solely on a credit card to pay for emergency needs, whether it’s a sudden retrenchment or a medical issue that needs immediate attention.
Your best bet would be trying to build up an emergency fund that amounts to about six months of your average pay. Start slow and commit to putting aside a minimum amount of money each month to ensure steady growth.
Be financially open with your spouse. Understand that if a situation occurs in which you are incapable of dealing with your debt, your spouse and family will have to bear the consequence.
Don’t keep them in the dark about money problems, as it will put a definite strain on your marriage. Also, be sure to consult them before taking out any major bank loans or entering any financial investments.
“Stealing” from your own cookie jar
It’s completely understandable that you may want to reward your family during a good financial period. You and your partner have been consistent with your savings, and both of you have worked hard to keep purse strings tight.
However, taking out money from emergency funds or savings accounts can be a slippery slope. Instead, commit 5% to 10% of your salary to a “fun fund” that can be collated and used every six months to treat the family to something special.
Just remember, you don’t have to spend thousands of dollars to have enjoyable quality time with your family.
In these day and age, technology helps us to do a great number of amazing things to make our lives easier and much less complicated.
One of those things is an automated savings transfer. Instead of manually transferring money from your account into your separate savings accounts, just activate an automatic bank transfer at the most comfortable time of the month.
Besides saving yourself the time and the hassle, you’ll notice that your savings seem to grow a lot faster!
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