When saving money, it is important to know there is a right and wrong way to go about it. Sometimes saving money can cost you more in the long run. Also, if you do not go about it in the right way and mentally change your spending habits, you may start out strongly but after six months give up on saving. Below are some of the common mistakes people make when they are saving:
Mistake #5: Stopping Spending
One major mistake that people make is that they stop spending, since this seems to be the obvious way to save money. The problem is, if done without foresight, not spending money can mean additional expenses down the road.
You should stop spending money on nonessentials. It is important to keep spending on preventive maintenance such as your car and dental check-up. This will hopefully help you avoid large expenses such as break downs and expensive dental work, which will eat into your savings more than spending money on preventive maintenance.
Mistake #4: Buying Cheap, Not Buying Value
More often than not getting the lowest price is not the best value. For items that you will use often, it is important to buy good brands that work well and last longer. Because if we are replacing an item every year it can add up quickly. An example of this is buying a cheap vacuum instead of buying a Dyson.
Mistake #3: Assuming There Is a Quick Fix
It’s important to realise from the start that the process of saving money isn’t going to instantly resolve itself but will take time and effort to succeed. Once you are committed for the long haul, you will avoid getting frustrated when things don’t instantly get better and have the patience needed to be successful.
Mistake #2: Assuming You Must Deny Yourself
Many feel that saving money requires denying the things that they enjoyed, which makes the entire process painful. To avoid this pain, they wait as long as possible to take the steps they need to lower their expenses and save money.
The truth is that saving money doesn’t have to be painful, although it will take a change in lifestyle related to how you purchase goods and services. You are probably paying more than you need to for a lot of the services and items you currently buy. Examples include, buying new clothes every week, instead buy them once a month. Instead of going out for dinner buy some gourmet food and cook at home. Shop at Aldi instead of Woolworths. Small changes like this will really increase your saving and may even improve your enjoyment of life.
Mistake #1: Believing There Is No Need to Make Fundamental Changes
Much like dieting, learning to save money is more than knowing what you need to do.
Many people think that they can learn to save money without making a fundamental change in the way they currently do things and approach savings as a short-term problem. When done this way, a plan for reducing costs and saving money never becomes a long-term priority, which results in not being able to save money the way they had assumed they could.