The Top 5 Savings Account Errors That You’re Likely Committing Currently

There are numerous reasons why someone could experience guilt. For instance, it might be time to reconsider your actions if you frequently hoof it at slower moving vehicles. You should consider your motivations if you purposefully treat waitstaff badly.

But, you should give yourself a break if you feel bad because you’re not doing things “just right” or you don’t have as much money in savings as you think you should. It is not a source of shame that mistakes are made by all people. The intention is to grow and learn as much as possible from such experiences.

Not comparing accounts with other providers

The disparity in interest rates is one thing that some of us have found shocking, even after decades of banking. Since credit unions are member-owned, for instance, they frequently provide interest rates that are greater than those of regular banks. Additionally, since internet banks are now an option, their rates are almost usually higher. This is due to the fact that internet banks do not have the costly overhead or physical locations that traditional banks do. They can, therefore, pay more.

It may be great if a customer is devoted to their financial institution regardless of the cost, but if this results in earning less than you could, it’s similar to shooting yourself in the foot financially.

The only way to find out if you’re throwing money away is to shop around. Examine credit unions, internet banks, and even conventional banks.

Consenting to a monthly charge

It’s hard to see why someone would agree to keep paying a monthly maintenance fee when there are so many savings accounts available. Experian reports that financial institutions with physical locations tend to charge maintenance fees more frequently. Additionally, while the monthly charge varies depending on the bank, a standard savings account typically costs between $5 and $8.

Reaching down

Opening a savings account is simple. It’s more challenging to resist temptation and let that account develop. Consider whether the money is a need or a desire before taking it out of savings. The choice should be clear-cut, for instance, if your favorite tennis shoes are on sale but you already own a lot of shoes. The choice is a little more difficult if your child wants to play travel soccer and you don’t have enough cash in your bank account to cover the entry cost.

If you must take money out of your savings account, arrange how you will pay it back. Here are a few simple ideas to help you pay back your account and save money:

Reduce your auto insurance costs: By switching auto insurance providers, you can save hundreds of dollars annually. If you combine that coverage with another insurance policy, like renters’ or homeowners’ insurance, you can save even more money.

Reduce the cost of your mobile phone bill: Change to a more economical plan if you’re not using all the features you’re paying for, such as international calling, wristwatch cell functionality, or particular apps.

Consider a level payment plan: Give your utility companies a call to see whether they offer a year-round level payment plan if you’re having trouble paying your bills on time every month. During months when utility bills are high, doing this can save you a ton of money.

Organize a garage sale online: The days of having to carry everything to your garage, put up placards, and let strangers go through your stuff are long gone. Take stock of your home and decide what you are willing to part with, even for a small fee. Next, post an advertisement for those products on Facebook Marketplace or a community website like Nextdoor.com. You would be shocked at how many individuals are hunting for a child’s playhouse or an antique mirror.

Neglecting to utilize high-yield savings accounts

Using a high-yield savings account is one of the simplest ways to make money these days. Consider why you have your money in a traditional savings account. It is virtually as easy to access in an emergency and just as safe in a high-yield account (many high-yield accounts allow you to withdraw money without incurring fees up to six times a month).

The difference is that with one of the finest high-yield savings accounts, your money can earn an APY of 5% or more instead of less than 1%.

Refusing to enable automated transfers

It’s easy to set up an automated savings account deposit from a salary check or checking account for a certain amount of money. With an auto-deposit, why even bother? The explanation provided by CBS News is as follows: “Automated savings help overcome the inertia of manual transfers.”

When you’re manually transferring data, it’s simple to put off the work. However, you can set up auto-savings without thinking about it again.

Lastly, resist the urge to think that you have to save a sizable sum of money all at once. You’re making progress even if you can just save a small amount of money each week.