Many of us try different things so that we can save money. There are things that can help us with this, but it is also important to recognise the mistakes that people make when they are trying to increase their savings in their savings account. If you can avoid these then this could help you to be more successful when you are trying to save money.
- Putting coins in a jar – some people will decide that they will save up certain coins or all their coins and then pay them into a savings account when they have accumulated a certain amount. This might seem like a way to save but it actually is not. Firstly, having the money in a pot rather than a bank account means that it earns no interest there. Secondly, by putting coins in a pot you are not spending less money. You just draw out more money and possibly even go overdrawn and that money is not saving. To properly save you need to put money into a savings account and make sure that you budget carefully so that you can manage to buy everything that you need on what is left without having to borrow.
- Saving at the end of the month – a lot of people will see what money they have at the end of the month and then pop that in a savings account. Although this sounds like a good idea, it is not the best one. This is because if we check the balance and see that there is money there, then we will spend it and so by the end of the month it is likely that there will be nothing left. However, if we put some money into our savings account when we have just been paid, then this will force us to spend more carefully and budget to make sure that what we have left lasts us until the end of the month. This can be a better way to ensure that there is always some money available to save but you will have to work out how much to regularly transfer so that you still have enough for what you need to buy. If there is still some left at the end of the month, you will be able to save this as well.
- Not Choosing a High Interest Savings Account – a lot of people will just choose a savings account which is with the bank that they have their current account with. This could be okay, but it is sensible to compare the different accounts to see how the interest rates compare. You could find that it will make quite a big difference if you choose an account with a better interest rate. This will mean that as you save, you will have more money added to those savings in interest and even a small difference in percentage rate can make a big difference. It is worth looking around regularly as switching can make a difference even when interest rates are low. There are also different types of savings account and it can make a big difference if you investigate these and choose one that has good interest. You may have to keep your money in the account for a certain period of time, give notice for withdrawals or pay in a certain amount in order to get better interest, but it is a good idea to make sure that you have some that is in an instant access account so that you have some that you can use for emergencies as well.