Ask Away Blog: How To Stop Dipping Into Your Savings Every Month

How To Stop Dipping Into Your Savings Every Month

Wednesday, October 28, 2020

 

We all know that saving money is important, but sometimes it seems like your savings account is never getting any bigger even though you keep putting money in each month. Usually, that’s because you’re taking money out again towards the end of the month, which makes the whole thing pointless.

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In some cases, spending your savings is the right thing to do. For example, making investments or paying for travel are both good reasons to dip into your savings. However, if you find that you are doing it every month, you’re making mistakes with your money management that need to be fixed. These are the best ways to stop dipping into your savings every month.
 
Be Realistic About What You Can Save

The most common reason that people dip into their savings is that they are trying to save too much. They get their paycheck and put a big chunk into savings, but they don’t leave themselves enough money to spend throughout the month. So, they get halfway through the month and realize that they’ve got no money left and it’s still two weeks until payday, so they are forced to take money out of savings again. The problem is, once you get into the habit of doing it, it’s so easy to completely clear out your savings. You will find that you are a lot more successful if you are realistic about what you can afford to save and you actually put less money into savings. That way, you leave yourself enough for the month and you won’t be forced to dip into your savings account.
 
Use A Certificate Of Deposit

A certificate of deposit (cd) is a savings account that has a fixed term, so you deposit your money and then you leave it for a certain period of time before taking it out, with the interest that you have earned on it. You can get some good cd rates so you will earn a good amount of interest on your savings and the best thing is, you can’t touch that money until the term of the deposit is up. It’s not a good idea to put all of your savings into a cd because you may need to access it in an emergency, but putting some of your money into one will help you to stop spending it.
 
Switch To Cash Only

When you have easy access to your bank accounts, it’s tempting to spend more than you can afford, which is why you should consider switching to cash only. When you get your paycheck, pay all of your bills and put some money into savings, then take out the rest in cash. If you set yourself a weekly spending budget with cash, and leave all of your cards at home, you will find it a lot easier to avoid the temptation of dipping into your savings.

You will never meet your savings goals if you keep dipping into your savings account every month. Follow these simple tips and you will find it a lot easier to resist the temptation.



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