Saving money takes sacrifice. In order to properly fund your financial goals you find it necessary to cut back in certain areas, and you’re OK with that. We all have to make tough choices to meet our financial goals, right?Well, for the most part, yes. Saving money requires some sacrifice, and in the long run benefits us. However, there are some ways in which we tend to try and save money that ends up backfiring.
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Here are three ways you should not try to save money:
Not Paying Off Bad Debt
Unsecured debt is debt in which there is no collateral. Meaning, there is no physical object that can be taken back in the event of failure to pay. A mortgage or car loan are examples of secured debt. The holder of these loans can repossess the house or the car if the debt isn’t paid back.
Debts such as credit card and personal loans stick with you, and tend to have higher interest rates than secured debt. Thus, the longer it takes you to pay these debts off, the more you end up paying in the long run. You want to have some savings but it doesn’t make sense to ignore unsecured debt.
While you are amassing money, you are owing even more in interest. Your savings account may bring a modest return, but it’s likely not bringing in more than the interest rate on your credit card. Make sure you are paying more than the minimum on your credit card as you slowly build up your savings.
Ignoring Health Care Needs
Remember the saying ‘your health is your wealth?’ Well, it’s true in more ways than one. Whether you’re attempting to save money by skipping annual doctor’s visits or not filling prescriptions, you could end up paying more in the long run.
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Healthcare is not cheap and the more an illness or ailment progresses, the more costly treatment usually will be. Skipping doctor’s visits can have consequences for both your health and your pockets.
Also remember that your health is impacted by your day to day lifestyle habits. If you are skimping on groceries and buying prepackaged or processed foods to save time and money instead of buying fruits and vegetables, this can have consequences for your health also. Saving money is great, but do not do it at the expense of your physical or mental health.
Avoiding Time with Loved Ones
We all have busy lives and try to find ways to cut corners to save. Unfortunately this may come at the expense of spending time with family and friends. If you are working longer hours to save money or avoiding going out to dinner or social occasions to save, this can be commendable. But you don’t want to wake up years from now with a pile of money and no friends or family left.
Make time for the important relationships in your life. Spending a little money every now and again to visit friends and family, or to go out and have a social life is important in maintaining an overall healthy, well-balanced life. Do not waste years avoiding social interactions because you would rather save a few extra dollars.
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With anything in life, balance is key. Sometimes it’s worth spending a little extra money upfront in order to save money down the line. Money is meant to be a tool to help you live the kind of life you want. Saving money is always great, but if it comes at the expense of your health or long term financial well-being, it may be time to look into your saving habits and making the necessary adjustments.
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