Savings is important. Whether you’re saving for retirement, for a stable future, your children’s education, or even your dream home, it is vital to be conscious of your finances.
Having a flexible savings account may be one of the first on your checklist towards financial freedom. It is not only a safe avenue for your hard-earned income but also one of the best ways to handle your finances.
Unfortunately, a few mistakes with your savings account can cost you dearly. What are these? And how to avoid them? Let’s take a look.
Not Treating it as an Emergency Fund
A savings account is your best bet to tackling financial emergencies with ease. Find yourself in a cash crunch? Need to take care of a medical emergency? If you want to navigate any such monetary urgencies hassle-free, treat your savings account as an emergency fund and keep an amount worth at least six months of your expenses.
This can help you avoid taking debts and allow for better management of finances. You can also consider setting up automatic payments to transfer funds to this savings account every month.
Not Checking Your Account Regularly
Another mistake you can make with your account is not keeping regular track of it. To avoid any unnecessary expenses, make a habit to check your account regularly.
Most banks offer you a mobile banking feature with a savings account. You can easily manage your funds, check your account, and get in touch with the bank if you find any expenses you didn’t account for.
This will help you become more mindful of your expenses and make necessary changes in your spending pattern. You can easily differentiate between your needs and wants and grow your funds over time.
Paying Bills Manually
With online banking on your savings account, gone are the days when you had to wait in line for hours to pay your household bills.
For recurring monthly payments like electricity bills, mobile bills, etc., you can set up automatic payments for added convenience. This saves you from the trouble of paying the bill manually or even missing the due date.
Additionally, savings accounts offer complete security of your transactions, so you don’t have to worry about any loss or theft. Moreover, make sure to monitor these automatic payments for added control.
Skipping the Account Fine Print
When you apply for a savings account, make sure to learn about the various charges and benefits associated with it.
While most savings account come with minimal charges, it is still vital to keep an eye out for them and get in touch with your bank to know what you’re paying for. Further, monitor any new charges introduced by the bank to avoid any issues.
Leaving Online Account Unprotected
Finally, the biggest mistake you can make is leaving your online account vulnerable. Protect your savings account with security practices and passwords.
Choose different passwords for your various financial accounts, create strong passwords to safeguard your sensitive information. Moreover, change the passwords more often and avoid entering any banking information in an untrusted device.
The Bottom Line
Follow mindful financial practices and be up-to-date with the ins and outs of your savings account to make the most of it.