4 Ways You Could Still Be Sabotaging Your Savings Accounts in 2013

saving and spending

 

4 Ways You Could Still Be Sabotaging Your Savings Accounts in 2013

Now that the Christmas spend is over, you’ve got a great chance to get a fresh start on your savings in the New Year.

But you could still be destined to fail. Sure, you’ve set yourself a budget and you’re cutting back, but you could still be wasting money on senseless expense and needlessly wasting money in other areas.

Why not put your mind at rest by making sure you’re not committing these savings sins with your financial accounts?

1)    Not Keeping Cash for Emergencies

The most expensive problem is the one you can’t afford to fix.

Keeping a decent amount of cash on hand could be your secret savings weapon, as having the cushion to soften the blow of any unexpected disasters could prevent you from getting into serious problems.

There are two major benefits for keeping some cash around; primarily it means you can afford to deal with any unexpected problems without having to take out a dreaded short term loan or borrow from someone else. The secondary benefit is that you’ll have the funds to fix the problem right the first time, rather than opting for a cheaper solution as a temporary solution which will end up costing you further expense later on.

2)    Avoiding Your Bad Debts

While putting money into your savings accounts is a smart move, if you have a high interest credit card debt or an outstanding loan, you could be on the verge of financial disaster

Most credit card and short term loan companies have insanely high interest rates that dwarf the return on most savings accounts, so your debt could be growing faster than your savings.

Best practice is to start paying off your higher interest debts first, then any other priority debts before you start saving.

3)    Being Brain-Dead With Big Buys

Everyone’s definition of a big purchase is different, but if it’s in the triple figures you should be asking yourself a few key questions before paying.

Ask yourself 5 simple questions before you purchase: Can I afford this item? Do I need this item? Do I need it right now? Is this the cheapest place to buy it? Would it be more worthwhile to buy this than a cheaper product?

 If you find yourself answering no to any of those questions, make sure you think about whether it’s really worth buying it at all. You should consider spending a couple of days thinking about a must-have purchase to see whether it’s still an essential buy after a cooling off period.

4)    Forgetting to Plan For Your Future

It may be tempting to focus on your financial well being for now, rather than in ten, twenty or perhaps even thirty years.

If you’ve stayed away from bad debt and you have a healthy looking emergency fund, why don’t you think about putting something away for retirement, or investing?

While some companies will offer a pension it’s very rarely anything substantial, so putting some cash away in a high interest savings account or you could even consider fixed rate bonds if you’ve got the commit.

What Now?

Now you have a great idea of what financial behaviour has been letting you down, here’s to a financially frugal 2013!

Author Bio

About Author :

Geoffery is a personal savings blogger in the UK market.  He specialises in comparing the Fixed Rate Bonds (fairinvestment.co.uk/fixed_rate_bonds) market writing for sites like Fair Investment Company – a high interest savings and investment plans specialist.

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