Nowadays, almost everything that we purchase is quite expensive, from internet connections to house rents. So many people try to save up money but end up saving nothing because of irresponsible money spending.
Many people tend to buy branded things just because it is widely known and gives them pride. Now it is pretty standard for humans to want stuff like this. Spending money to buy your favorite Nike shoes or adding a modification to your vehicle is okay. But we should be mindful of how we spend our money and what we spend it on. Is it worth spending this particular amount? What are the problems of saving money you have? Let us discuss. There are a lot of problems that arise when you try to save money. Is there any way to minimize these problems? Absolutely, Yes.
Not having enough money to begin saving.
One of the main dilemmas for saving money is not having enough money. You might have only one source of income, and this source of income is not enough for you to start saving money. When you pay bills and buying the groceries you need, you might be left with a meager amount to put towards saving. This is a call for you to try side hustles. There are a lot of side hustles that require no money to start. You can explore ways to make money with side jobs. Using this, you will make more money and will be left with more money to put towards savings after paying bills and all.
Prepaid or Postpaid internet connection: Which is better for you?
Internet connections are usually expensive, and almost everything we do requires an internet connection. So getting rid of your internet connection is not a plausible solution. But what we can do is find out the perfect package that fits us.
I think postpaid internet is a good option because the price is the same every month, so you can figure out which postpaid package you can benefit from most. However, one problem regarding postpaid internet is that the package you see fit for yourself might be costly, and if you buy a package that is not sufficient for you, you might run out of data. This will make you add extra gigabytes of data which in turn will increase your bill.
So when buying a postpaid internet might not be suitable for you. On the other hand, prepaid is when you pay for a small amount of data and reload when necessary, so this way, you might not waste your data and might save money. But this can also be expensive if you are a person who spends most of your time on the internet, and if you frequently run out of data which in turn will make you reload, you might end up spending a lot for a single month. So it is your responsibility to figure out which internet connection will fit your lifestyle. And make sure to compare all the prices from different internet service providers available in your country before finalizing your decision.
What investments are harming your financial stability?
Well, some investments are not entirely a waste of money based on the way you use it, but some might be way out of line. For example, a gym membership, if you are a person that frequently goes to the gym, then a gym membership is not a bad investment but let us say that you are not a consistent gym go-er. You go to the gym on an irregular schedule. Then it is clear that a gym membership is a waste of your money, instead invest some money to buy an exercise mat and a few dumbbells so you can work out at home.
Another is your tendency to purchase overly expensive branded items. Clothes, shoes, and other things that are branded are usually costly. This is because they perform the same task as another item of a cheap brand does. Yes, the branded items may have benefits, like reliability and much more. But buying more than required is certainly not a good idea. For example, buying one or two pairs of a branded shoes is usually okay, but you should do that if you are in a position to spend a large amount of money on one item. If a service or any item you are about to purchase is unnecessary for you, ask yourself whether this is worth spending your money on. Being mindful is essential when it comes to saving money. So keep that in mind.
Credit Cards might not be a good idea, or is it?
Almost everyone owns a credit card. Credit cards are very beneficial, but it does have potential risks. One most common problem is when you do not have a good credit score which means not paying the credit card bills on time. Maintaining a good credit score is necessary when you own a credit card. You can easily be in debt if you are not managing your credit card payments. But on the other hand, it has many valuable benefits like when buying a car you can get insurance for a better and a beneficial rate. You can be eligible for higher credit limits for credit cards which means you will afford things that you couldn’t earlier. A good credit score will help you greatly when purchasing houses too. So the pros of owning a credit card might outweigh the cons, but the cons can seriously dent your financial status if you don’t keep it in check.
Purchasing a vehicle beyond your means.
A car is a necessity in these contemporary times. But when it comes to purchasing a vehicle, you have to be careful not to buy a car that is way beyond your needs. Many youngsters dream of owning cars that are fast and fancy. These fancy cars are sure to be expensive. If you are also planning to purchase an expensive sports car, you have to be sure to afford it. You are considering every aspect like gas money, servicing, and insurance. If you can afford these without any issue, you should go for it. It is always your decision in the end.
Prioritizing wants over needs
When it comes to saving money, you have to know why you are saving money. The most common answer is to be financially stable. But saving money has to be done smartly. If you sacrifice your well-being to save money, is it worth it? Your well-being is the main priority. If you try to save money but risk your health in the process, then there is no point in all the saved money. We as humans have needs. We need water and food. But there are certain things that we do not need. Some of these things might not be very expensive but can potentially harm your wallet and bank accounts. You have to differentiate between what you need and what you want. Just because you want it does not mean you need it. If you are saving money, you have to be careful when it comes to this.
You think that you are young, so you should spend on experiences.
Every teenager tends to say “YOLO,” you live only once. Unfortunately, this also means they can spend crazy amounts of money on unnecessary things they will later regret in life. This doesn’t mean that you should save without experiencing your youth, try to keep your expenses on a budget to save consistently. Also, do not spend on these experiences if you do not have a steady source of income.
Spending on convenience
Everyone always likes to choose the convenient option. Convenience always adds extra to your spending limits. These habits can lead to costing more money in the long run. For example, buy your groceries from a supermarket and not a convenience store, cut your vegetables rather than buying pre-cut vegetables that are way more expensive.
Not having financial goals.
Anything you save for can be a financial goal. For example, if you want to buy a house, you will have to pay a deposit fee to start living in the house. To have the amount for the deposit, you will have to save up a certain amount for a few months/years so you will reach your end goal of buying a house.
Having one bank account.
Having one bank account might urge you to spend money on unwanted items, which means you won’t be able to save money. I recommend any person to have at least three bank accounts, cheque (for daily usage), Savings (Money you put aside as savings which can be easily accessible), 2nd Savings (This account should be a bit hard to access). Try to transfer 10% of your income to the hard-to-access savings account so you will save up money over time without even knowing.