I pride myself with the fact that I am pretty good at saving money. My budget is very tight, so I do have to get creative making sure bills get paid and we have dinner every night. I have tried many different tactics, some worked, and some did not.
I have compiled a list for you 5 common mistakes I have made when trying to save money that have completely backfired.
- Using coupons when grocery shopping. Don’t get me wrong, I love coupon shopping; it’s like a scavenger hunt at the grocery store! I get to scour the shelves looking for this specific name brand item with exact wording and size container. If I have all day to shop, and an extra $200, coupon shopping is the way to go. In reality though, unless you are using coupons for items that you actually use and is on your list, they actually blow your budget.
- Only making minimum payments on loans/credit cards etc. Although this looks great on your monthly expense budget, but actually you are spending more in the long run. The interest rate accrues on a daily basis; the longer you take to pay off that loan the more interest you’re paying in the long run. A good way to knock down that principle balance is to pay half every two weeks instead of once a month (an extra full payment gets paid yearly) or add more to the minimum amount to knock the balance down faster.
- Having a high deductible on my car insurance and skimping out on coverages. Unless you have $2500-$3000 laying around in your couch cushions this can really hurt the budget. If you were actually in an accident, (and it wasn’t your fault) the person that hit you might have crappy insurance or no insurance at all; then you are stuck paying for damages, car rental, medical bills out of pocket. The best way to go is getting the lowest deductible, and make sure you have rental, towing and personal medical coverage. The difference is only a few dollars a month on your insurance bill, but will definitely save you if or when an accident happens. This actually happened to my daughter. Boy did it hurt the pocket book!
- Not having a savings account. My budget is so tight I mean where and how am I going to squeeze more money out and just park it somewhere? Well, there might be an emergency situation (see above) where we need to pay for something not in our normal spending. Not only will it throw your budget completely out of whack, you might have to get a loan to take care of that emergency, then that loan payment makes the budget that much more unbearable. If there is anything left over, even if it’s 5 bucks put it in a savings account. Or better yet, if you can sell stuff on EBay or recycle cans, anything that can make an extra buck, put that money in a savings.
- Not having a budget at all. I can’t just be willy- nilly paying bills and buying groceries without set limits. Not only do I not know where my money is going but I might be blowing money on stuff or services I no longer need, like that jelly of the month club or cable and the TV went out months ago. The best place to start is to write out all of your bills and payment amounts and average of what you spend on groceries and entertainment, childcare, gas, everything. And work from there to start making your budget. Then maybe I can save to replace my TV. I actually have a 3 part blog on getting yourself on a budget and raising your credit score. You can check that out here.
Living paycheck to paycheck is not fun at all, and there are so many creative ways we can save money and build that little nest egg we all need to feel warm and fuzzy at night. If there is any other ideas you can add to this list please comment and subscribe!