Things You're Getting Wrong With Your Savings Account
/When it comes to your finances, conscious spending is one of the best ways to make sure that you make the most of every bit of money that you have. Additionally, having a freedom fund, or savings account, is another way to make sure you make the most of the money you have.
Without a freedom fund, should anything happen, then you can find yourself in a precarious situation. It is your safety net, it is the place that you turn to when you really need the financial support to take a leap of faith or remove yourself from an unhealthy circumstance. To help to protect your account in the best way possible, we have put together some of the main mistakes we see and how you can fix (or avoid) them.
Photo by Rio Kuncoro from Pexels
Not having one
One of the main mistakes when it comes to savings accounts (and one of the most obvious ones at that) is not having one. If you don’t have a savings account to fall back on when times get tough financially, you might struggle or end up getting into unnecessary debt. We recommend putting money away on a regular basis, just in case you need to fall back on it at some point. This doesn’t have to be a large amount, whatever your finances can afford you, the main thing to remember is that this is a lifestyle habit. At Money & Mimosas, we recommend scheduling a weekly money date for every Friday to review your finances and to transfer a percentage of your earnings to your savings account. Click here to watch a fun, short video about money dates.
Spending what you’ve saved on the wrong thing
Another issue can stem from what some people view as an emergency. Unlike most financial education sites, at Money & Mimosas, we do not refer to savings accounts as emergency funds due to our commitment to fostering a collective abundant mindset. With that stated, emergency situations do occur and having money in the bank will help with those emergencies. Of course, we all have different viewpoints on what to spend our money on, however, before dipping into your savings, be mindful of how you define an emergency. Be honest with yourself on whether or not your purchase warrants using the funds in your savings account. Emergencies can be identified as something that is unplanned, that needs to be paid for immediately, and that you couldn’t have the same life without it. If the expense doesn’t quite fall into this framework, then it probably isn’t worth delving into your savings.
Not adding more money if you have to spend some
If you do come across something that requires utilizing your savings account, the next step is to work towards replacing whatever amount of money you took out. Of course, you may not be able to do this all at one time, but you can create a plan to work towards it. Protect yourself, your family, and your money by making sure that you do whatever you can to build your savings. We can promise you that putting money away every week, no matter how little an amount, is worth it.
Not investing too
Having a savings account is great, but if you want to be financially free, you shouldn’t rely on it alone. It’s vital that you also invest in your own business or through another investment vehicle, if you want to see your money grow. When it comes to investing, gold is valuable because it’s a precious physical commodity that can weather most financial storms, but you could also invest in stocks and shares, property or, a million other things to build wealth. The key is to actually take the time to invest in something above and beyond your usual savings accounts to maximize your profits.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.
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