6 Fatal Financial Sins to Avoid When Saving

You can’t deny that when payday comes around, the bank balance gets checked and you instantly get excited at the healthy amount staring back at you – we’ve all been there! But in this moment you have a decision to make. Do you either get carried away and spend spend spend or do you start financial planning for the month ahead?

Today, we’ll be looking at the different ways to avoid financial sinning when you’re trying to top up the savings account.

Ignoring your budget plan

It may sound simple and obvious, but planning is crucial. Putting together a budget of how to spend your cash won’t take as long as you might think and it’ll become less tedious when you realise how close you are to your saving goal.

Payday can lead you into a false sense of security and allow you to think you have more than you have. Looking at how to budget money for the month and accounting for what’s being spent on bills, food and days out will highlight how much money is left over for the savings account, allowing you to put a little aside for that dream home or holiday you’re thinking of.

Impulsive payday splurging

Payday splurging is a crime everyone’s committed at least once. How can you not when you take that first look at your refreshed bank account? However, before you splurge, think about the savings account that you’re working so hard to top up! Is that takeaway or new outfit for the weekend worth it when that money could be going towards the new kitchen you’ve had your eye on for years?

You never know, if you’ve budgeted well enough, you might be able to have both the savings account topped up and the small payday splurge if you simply can’t live without a little touch of monthly retail therapy.

Online shopping

Taking out a payday loan

Falling into the trap of a payday loan will not only prevent you from adding to the savings account but also having to manage debt. Remember, you’re not only lending the amount of money you ask for but all the interest that comes with it. If you’re getting close to the end of the month and you’re feeling the temptation for a quick loan, go back over your budgeting and see if you can work some financial magic.

A payday loan can also be tempting for those with a bad credit rating – making a no credit check loan that much more appealing. No credit check loans, however, can be a little misleading because they all have some element of credit checking. A bad credit rating doesn’t always mean you can’t get a loan, so check out our bad credit loan advice here if you feel as though you’re stuck in a financial rut.

Falling for finance deals

Finance deals are so tempting and easily purchased. When something goes from being a huge lump sum payment to just a few pounds per month, it’s easy to tell yourself into thinking that you won’t even notice it leaving your account.

Before you get yourself tied into a year-long finance deal, think about whether you can afford another monthly outgoing. If the answer is yes, are you willing to also payback the interest fees? This is a good time to take stock of the thing you’re considering taking out finance for. While it might be worth its price on paper, once you factor in the increased cost for spreading payments over a number of months on top of the interest, you might decide you don’t actually want it that badly after all.

Continuing the lending cycle

Instead of looking at a payday loan, do you go to your nearest and dearest to lend £20 here and there and say you’ll pay them back on payday? Does payday roll around and you find yourself needing to borrow from them again until next month? If this sounds familiar, it’s time to stop the lending cycle. If you’re in a position where you owe a few family and friends money, budget your month to pay this back as quickly as possible – without leaving yourself unable to pay other bills – so that in the following month you can budget to put the money in your savings account instead.

If you’ve found yourself in a bit of debt-related trouble, it might be worth thinking about a debt consolidation loan. Speak to a professional about the best options for you – but by bundling up your debts into one, affordable monthly repayment, you might just find your bills that much easier to manage.

Stacked pound coins

Failing to shop around

Get your haggling, thrifty, negotiating (or whatever you want to call it) head on and find the best deals. Don’t just buy something because you feel as though you don’t have time to shop around. If preferred, use price comparison tools to do the job for you.

One of the best budgeting tips is to spend half an hour researching whether you could save money by changing where you do your weekly food shop or where you get your car insurance. It could save you a considerable amount of money per month that could be added to the savings account – so it’s well worth investing a little time into trimming back your outgoings.

So, there you have our 6 sins to avoid when trying to top up the savings account. Keep an eye on the Jolly Good Loans blog for more money saving tips and ideas.