Avoid costly mistakes when opening a savings account. You can start saving money and keep that money in savings if you dodge the problems and follow the principles listed here.
Below are the 10 most common errors people make when they open a savings account and saving money tips that help overcome them.
MISTAKE # 1:
Not having a smaller emergency fund on the side for immediate emergencies or problems
It is great to work on saving money for a long time, in big ways, or for a substantial emergency, but if you don’t have something to use for all the small immediate emergencies while you are working on your savings account plan, you are not going to have that very savings account you are working on for long.
This never-spoken-of step will help protect the money you have saved in your savings account.
Keep some money into a smaller separate emergency fund (let’s just call it your kitty) while you are working on the larger savings account so you won’t have to rob from your larger savings when problems arise during those first few days or months.
If needed, have a yard sale to help fund that “first response” savings, or work a few extra hours if you can and keep some of that extra earned income on hand. Toss some leftover spending money or vacation cash in when it wasn’t used. Skip a few restaurant outings and put those funds into an easy to use location. (Don’t worry. If you have the discipline to purposely cut down on eating out expenses, you’ll find the discipline to keep the money you saved doing that.) Even begin to save the change you get from cash purchases or put your birthday money away to use if needed. Just don’t rob your kids of THEIR birthday gifts from grandma!
You might even consider dividing your savings plan dollars up for a while, putting a certain percentage of those dollars into your emergency kitty while still depositing the other percentage into your larger account.
Keep this emergency kitty fund fueled too with the extra cash that comes your way from time to time or from surprise income that comes from unexpected places. (Thank you, Lord for those times and blessings.)
If you have some smaller savings close at hand to use when needed, you won’t need to take money out of your “official” savings account.
Using the money saved because it’s there (This is my pet peeve with many people who have found ways to save money on a tight budget only to spend it all in one shot)
I keep seeing this ad on TV about a home warranty that a family purchases because they had a $1,000 savings account and then “had to use it all” when their refrigerator broke down and they used all their set-aside money for a new refrigerator.
Really? $1,000? ALL of your emergency savings for a refrigerator when you worked months or a year or more maybe to get that $1,000 into your emergency savings account? Personally, I think you should have purchased a USED refrigerator to use for a while, TV Mom and TV Dad and TV Kids.
Look, I am not against home warranties. They have come in handy in our past as rental property owners in particular, and I can see where some homeowners might love these things and make good use of them. The problem is, these folk just used up every bit they saved to get a new refrigerator when their old one flew the coup. Didn’t they maybe have a better option at that very moment of their lives?
Just because you have money setting around doesn’t mean it is there to use all up, even if you have it there to use all up in an emergency. You COULD. You don’t need to, not usually anyway.
Instead, make purchase decisions like you would if you had nothing or a lot less than you have there to use.
Think like this: If I only had $300.00 to use right now, what would I do right now? I bet you would come up with several things, most of which cost $300.00 or less.
Feeling obligated to put a certain amount of money into a savings account
Do what you can, and feel good you did something.
After 30 some years of marriage and many months that went without saving a dime because I couldn’t save a boatload of them, I have realized that it would have been better to have put what I could into a savings, even if it was little, than to have put nothing aside at all. In 30 some years, that $5.00 here and $10.00 there and $100.00 once in a while could really been a lot today. I guarantee that I would have saved more doing ‘whatever’ than not having done ‘whatever’.
There is no absolute when putting money into a savings account. Just do what you can, even if it does not seem like a lot to you, and you will be better off for it later.
Being inactive instead of proactive
We are ostriches at heart. I’m sure God put ostrich feathers in our armpits… or somewhere . When times are tough, most of us respond by the self-preservationist act of putting our heads in the sand and letting life go by without us. We just stop doing!
Don’t let your financial life stop when life is tough. Do something – anything proactive!
It feels good when you move towards something. So move. It will make a difference in so many ways.
Being motivated by a life goal instead of a financial management goal
I used to have a pontoon boat on the front of a notebook which was supposed to serve as a reminder that I wanted to get rich someday. (So I got that from a multi-level-marketing company. OK? Just let it go now.) Someone told me to put a picture of something fancy in front of me to motivate me. Well, I am not the fancy type of person, so a larger boat might have made me feel awkward anyway. I picked a pontoon boat.
Know what? Even that pontoon boat never did really get me interested enough to try to get rich doing that MLM work! My life goals changed too many times! (Not to mention I wanted my family to benefit from any money I made, and I’m pretty sure a pontoon boat would have gone over that well.)
Then I discovered what worked better than a pontoon boat (or whatever may tickle your fancy at any given moment.) I discovered I really wanted to have my financial house in order… just because!
Realizing how much better life really is when you have control over finances really does feel so much better than any dreaming. It really does.
Stretch yourself to do the right thing with the money you have, and you will find the puzzle pieces of your life will fall together much more quickly than when your eyes are focused on tangible objects of no use to your family today.
Overlooking money saving ideas and strategies which get more money to save
It takes work to find money to save sometimes. Fortunately there are lots of books, websites, and even friends you can learn financial strategies and money savings tips from. Take advantage of them all! Figure out how to save money everyday, and you’ll find yourself with extra money to save.
Highly Recommended Money Saving Tool:
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Not having access to an online savings account
It is so much easier to deposit money into savings if there is not a real person looking at you from behind a bank desk. You never have to feel funny putting $2.00 into your account if you so choose. You can add $300.00 one week and then $3.00 the next. You have perfect flexibility with a bank account online. You also have humble privacy, and it is easier to save.
You can set up online bank accounts right from your computer. Most local banks and credit unions have online back account access as well. If you need assistance finding out how to access your account from your local financial institution, go talk to them, and they will gladly assist you with this.
MISTAKE # 8:
Using a bank that does not have a free savings account program
There are banks that do not require you to have a minimum amount in your savings. There are banks that will charge you here and there and everywhere for this or that. Why lose money when you don’t need to? Look around for the best online savings account you can find. Find a bank with a no fee savings account.
You may be able to get a good savings account with bad credit even. If possible, clear up any and all outstanding balances from previous bank accounts first. Outstanding balances are usually the biggest obstacle in getting a good bank account.
Carefully read bank policies and costs for accounts at several local or online banks. If you think it might help, talk to your community’s bank or a credit union and see if they will hold a previous bank history against you and if so, what it will cost. You will probably find that getting a savings account is much easier with bad credit than opening a new checking account.
Whatever your financial situation, either get a savings account with no fees or at least get the best one you can.
Ignoring the need to manage your money overall, to manage finances well for your family
You may be thinking that great concert or a bigger gift for your husband is worth not having money to pay a bill on time, choosing to pay a late fee instead. You have cost your family money now and later.
You may be thinking you can start tomorrow. Let me tell you (because I know… I have been there) – When you start tomorrow, tomorrow never seems to come.
You may also be thinking there are more important things in life right now than saving. Here again, I am a painful exhibit of one who had that thought, and now I realize that for many of the things I felt I needed money for at some point in my life, I could have done without a lot of it.
Add to that the fact that I now have tenfold things, real family needs, I wished I had money for NOW, and that I might have had money for now had I not spent unwisely in the past and saved instead.
That is painful for me to admit. At least give me kudos for honesty.
Take money saving goals seriously, and don’t overlook them at any time of your life. You don’t know what is ahead of you and how much you might someday need that money you COULD have saved along the way.
Going it ALONE
If there is anyone at all that can share in the work at hand and in the joy from the labor, include them. Satan is alive and well in this world, and Satan loves money. He loves to mess people up, and he loves to use money to mess people up. It seems to be such an easy way to do so!
Keep a line of communication going with your spouse, and always do so lovingly and respectfully, so that the two of you can work through the challenges together and enjoy the fruits together as well.
There is someone else you can lean on to do this money stuff right this time. Your Heavenly Father has all the wisdom, knowledge, and ability to help you.
Call on Him to give you wisdom and strength and yes, grace and mercy too if you need it. He can help, and He wants to do so!
Starting a money savings account is not just for the rich. It does not need to be just for those who have lots of money to invest either. If you learn how to save money, set your heart towards that goal, and begin doing whatever you can to put money aside for the future, you can begin saving now, keep money in a savings account for years to come, and reap many of those rewards you so badly want your family to enjoy in the later years.
And the Lord answered me: “Write the vision; make it plain on tablets, so he may run who reads it. 3 For still the vision awaits its appointed time; it hastens to the end—it will not lie. If it seems slow, wait for it; it will surely come; it will not delay. -Habakkuk 2: 2-3 (ESV)
Recommended Reading At Amazon:
All Thomas J Stanley Books (Author of The Millionaire Next Door)
More Great Reading For Young Adults, College Students, and Young Couples:
Why Didn’t They Teach Me This in School?: 99 Personal Money Management Principles to Live By (A great gift for graduating seniors!)