5 Signs You’re Not Saving the Right Way

Photo (cc) by kenteegardin

I once went on a date with a friend of a friend. Before appetizers, he asked what I did. I told him I was a personal finance writer, and he told me he didn’t believe in all that “hooey.” In fact — I kid you not — he said he kept his money hidden in his kitchen.

We didn’t have a second date.

When it comes to saving money, not every way is the right way. And keeping large amounts of cash stashed around your house isn’t the only wrong way to save. Here are a few other indicators you’re doing it wrong.

1. Being loyal

If you’ve had the same bank for years, you might be missing out on free money. Another bank may have higher interest rates on savings, lower fees or any number of bonus programs not offered by your current bank.

At least once every two years, compare the rates and deals at several banks to make sure you’re earning the most on your savings, or at least paying the least possible amount in fees. If you’re not, give your bank a chance to compete. If they’re not interested, switch. Check out our interest rate search to look for better rates.

And while you’re at it, make a day of it: Compare prices on auto insurance, cellphone plans, Internet service and anything else you’re paying for. If you’re not getting the best deal, switch or call your current provider and ask them to meet the rate. You might be pleasantly surprised.

2. Sticking with brick-and-mortar

If you’ve been wary of Internet-based banks, reconsider. Legitimate online banks are backed by the FDIC, so your money is safe, and since they have lower overhead, they often have higher interest rates than brick-and mortar banks. For example:

Current rate on brick-and-mortar savings accounts:

Current rate for online savings accounts:

Moving your savings to an online bank is simple: In most cases you can link your new online account to your checking account for same-day transfers.

3. Not tracking your spending

The best financial move I’ve ever made was tracking my spending for a month. If you’d asked me before I kept track, I would have told you that I was the queen of frugality, saving money at every turn. But after 30 days of diligent tracking, I realized I wasted a lot of money.

If you’re not keeping track of your spending, start. Free services like those offered by our partner, PowerWallet, will do most of the work for you. You might be surprised about what you learn and how much you can put aside simply by seeing what you’re doing now.

4. Buying on sale because, well, it’s a sale

A lot of us are guilty of this: buying clothes, shoes, accessories or even groceries just because they were on sale. At best, you end up with some stuff you could use but didn’t really need in the first place. At worst, it ends up in the trash bin or donation pile.

Resist the urge to shop sales. Instead, decide what you really need, then wait for it to go on sale.

5. Saving solely for needs

A lot of financial advice suggests saving for needs – emergencies, college educations, or maybe a car. And while that’s obviously smart, experience has taught me that saving only for the things you have to buy kind of makes you hate the whole process.

Instead, set aside some of your savings for fun stuff – a dream vacation, a huge flat-screen TV, the new PlayStation 4 — whatever you find exciting. You earned your money, so you should get to spend (some of) it on what you want.

Do you have other examples of the wrong way to save? If so, share them on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
Secret Ways to Save on Netflix
Secret Ways to Save on Netflix

These little-known savings tactics can help whittle down what you pay for your streaming video subscription — every month.

How Much of My Social Security Can My Ex Take?
How Much of My Social Security Can My Ex Take?

A man wonders if his ex-wife will siphon away his Social Security benefit.

10 Bad Money Habits That Are Robbing You Blind
10 Bad Money Habits That Are Robbing You Blind

Here’s how to change those bad behaviors.

New Ways to Save Money on Insurance of Every Kind
New Ways to Save Money on Insurance of Every Kind

Tech startups are making it easy to find the best rates for all kinds of insurance policies.

7 Hobbies That Help You Live Longer
7 Hobbies That Help You Live Longer

Research shows some hobbies can add years — or even decades — to your life.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

Medicare Will Not Cover These 6 Medical Costs
Medicare Will Not Cover These 6 Medical Costs

Don’t let these health care expenses catch you off guard in retirement.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

Beware This Hidden Ingredient in Rotisserie Chicken
Beware This Hidden Ingredient in Rotisserie Chicken

Something foul may lurk in those delicious, ready-to-eat birds.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

This iconic dinnerware is prized for everyday use as well as reselling for profit.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

5 States With the Worst Health Care for Retirees
5 States With the Worst Health Care for Retirees

All of these states are located in the same region of the nation.

12 Deep Discounts Available on Amazon This Friday
12 Deep Discounts Available on Amazon This Friday

These items are steeply discounted — but the deals won’t last long.

5 Products You Should Never Buy Generic
5 Products You Should Never Buy Generic

Sometimes the brand-name version is clearly superior.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.