Saving money is a fundamental aspect of achieving financial stability and security, providing a safety net for unexpected expenses and enabling people to realize their long-term goals. However, the importance of saving money, many individuals find it challenging to build their savings.
Some people don’t employ effective financial planning, while others simply lack the discipline to set aside money in their savings accounts. Some might not also be aware of the different tools and solutions they can utilize to help them save money, such as those that may be offered by high-interest savings banks like Maya.
Additionally, financial pitfalls can hinder an individual from making progress toward their savings goals. In this article, we’ll discuss some of the most common mistakes people make when trying to save money and how to best avoid them.
1. Not Taking Advantage of High-Interest Savings Accounts
Many individuals overlook the opportunity to maximize their savings through high-interest savings accounts, particularly those offered by digital banks like Maya. Traditional savings accounts often provide minimal interest rates in the ballpark of 0.10% to 0.25% per year, resulting in sluggish growth of funds over time. However, digital banks, with their lower overhead costs, can afford to offer more competitive interest rates on their savings bank accounts.
In the case of Maya, we offer the best savings account Philippine customers can take advantage of. You can earn up to 15% interest per annum (credited daily) when you open a Maya Savings account. The process is easy, too, and you won’t have to deal with tons of documentation. You can get started by just submitting one ID, and you won’t have to maintain a minimum balance, which makes saving money more convenient and flexible. The best part about this is that you can enjoy the convenience of the digital banking experience, which lets you access your bank account anytime and anywhere.
2. Not Budgeting Your Money Wisely
One of the most common mistakes people make when trying to save money is not having a budget in place. Without a budget, it's easy to lose track of expenses and overspend. Budgeting wisely allows you to allocate funds for essential expenses, savings and investments, and discretionary spending. For starters make sure to track your income and expenses. Set realistic spending limits for various categories and stick to your plan. It’s also a good idea to make use of budgeting apps or spreadsheets to help you stay organized and accountable.
3. Neglecting to Save Regularly
Another common mistake many people make is that they’re not consistent when it comes to saving. They tend to put off contributions until they feel they have a substantial sum to invest. But this shouldn’t be the case. Even small, consistent contributions can accumulate over time and help you save up.
Having said that, make saving a priority by quickly transferring funds from your paycheck or checking account to your savings account. For your Maya Savings account, you should be able to deposit quickly and for free from your Maya Wallet. You can also deposit from other banks and e-wallets via PESONet and InstaPay. It will help to treat depositing money to your Maya Savings account like any other recurring expense. This ensures that saving money is accounted for in your budget each month.
4. Neglecting to Set Financial Goals
Apart from making saving money a habit, another significant mistake people make when trying to save is neglecting to set clear financial goals. Without specific goals, saving can feel aimless and unmotivating, making it easier to dip into your savings for unnecessary expenses.
With well-defined financial goals, you give your saving efforts direction and purpose. Whether you're saving for a new gadget, a dream vacation, or a downpayment for a car, clear goals help you stay focused and disciplined. To that end, consider using Maya Personal Goals, which allows you to create distinct accounts for specific objectives, and they are set up in such a way that they are separate from your Maya Savings account. You can set up to 5 different goals and keep them for a maximum of 180 days. Each goal also earns 4% interest p.a. (credited monthly), which should help you reach your objectives sooner.
5. Overlooking Long-Term Financial Planning
While saving for short-term expenses is important, don't neglect planning for the long-term, whether it means setting aside money for your education, for getting settled, for retirement, or something else. Take the time to assess your long-term financial objectives and develop a strategic plan to reach them. You explore how investment products and time deposit accounts can help you make the most of the money you save.
Maya Time Deposit Plus should be a good place to start if you want to lock in your fund for a set term to take advantage of high interest rates. With Maya Time Deposit Plus you can earn a guaranteed 3.5% p.a. interest (credited monthly, which can be boosted up to 6% p.a. when you reach your target amount. Additionally, you can choose terms of 3, 6, or 12 months, letting you grow your money depending on your objectives. You can create up to 5 active accounts at a time with a PHP 1 million balance each so you can earn up to 6% p.a. for up to PHP 5 million in total.
If you want to save more money, make sure to avoid these common mistakes and adopt practical solutions to help you achieve your financial goals faster. Take advantage of the solutions available to you, whether it’s a high-interest savings account, a personal goals tool, or a time deposit product that lets you lock in your money for a period of time. Moreover, practice effective saving and financial management techniques such as creating a budget, saving regularly, and prioritizing long-term financial planning. Remember, every peso saved brings you one step closer to realizing your financial goals and securing a brighter future for yourself. Start today and reap the rewards of smart saving habits for years to come.
