Everyone is guilty of falling short of their monthly savings plan, or having to dig into this account to pay for an unexpected cost. However, there is a difference between essential and non-essential items you could be using this money on. And once you start utilising your savings, or not committing to them at all, it is easy to fall completely off-track. To stay ahead in your own financial goals, below are some common signs that you may be starting to slip on your savings.
Using Credit
It is fine to use credit for larger payments, but you should be aiming to pay this back over the following few months, or at least have made a substantial effort to reducing the balance. However, if your credit balance is remaining constant, then your savings have slipped and you could end up at a financial disadvantage.
Continued Spending
Having good intentions is very different to having will power. Even if you deposit a large portion of your pay into your savings account, if it’s not there at the end of the month, it doesn’t count! Continually dipping into your savings and over-spending on non-essential items could signify that you have slipped off track. If your position or salary hasn’t changed then you should not be spending more. Reassess where your money should actually be going and how to keep it there.
A Non-existent Budget
You may have started out with a detailed budget, but that doesn’t mean you are still following it a few months, or even a few years, down the track. An easy way to discover if you are still working to a budget is to ask yourself how much you’re spending each month. If you don’t have an answer then you are not in control of your finances. Sit down and redo a budget based on your current salary and expenses, including a regular amount to go to your savings account. If you’re feeling lost or have failed in the past with creating a viable budget, don’t rule out contacting a company that specialises in budgeting, such as Positive Solutions Finance.
Your Account is Stationary
It is common to get caught in the routine of life and forget about contributing to your savings account, particularly if you are not saving for anything in particular. Assess the current state of your account and compare it to where it was sitting 12 months ago, or even 2 years before. If the amount has only increased by interest or by a few extra payments, then your savings have gone awry.
Late Payments
If you have been late on rent or other regular payments then your savings has been slipping. It is something that happens to everyone on occasion, but it should not be a constant issue. It is important to put money aside for essential bills when you receive your pay so overdue statements do not become part of your life.
Saving money, even in small amounts, should be on everyone’s agenda if you want to experience financial security. It is common to slip on your savings; however, if this becomes a regular concern, reassessing your finances and where your money is going becomes essential to get yourself back on track.
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Personal Capital lets you see all of your accounts in one convenient place. Sign up now for free.What have been some of your biggest slip-ups when it comes to saving? Leave your answers in the space below.
What a good idea for a post Harry! Stagnant savings is a sure sign of trouble. People should be saving at least 10-20% a month, if not more. Anything less means extra work later on to catch up.