Save Money

Top 10 Mistakes Most People Make When Trying to Save Money

Have you been trying to save money, but nothing seems to work? The harder you try the more you fail. Are you feeling discouraged and want to give up?

No doubt saving money is hard. However, you may actually be sabotaging your own efforts by not realizing that you might be making some common mistakes that can easily be fixed.

So if you’re serious about wanting to save money then it’s time to tackle these mistakes and get yourself on the road to success.

Let’s take a look at the most common mistakes when trying to save money and how to fix them.

1. Saving for retirement instead of emergencies

Quite often when people think about a savings fund they associate it with their ‘future life’. Meaning that they are trying to plan ahead and prepare for their retirement rather than preparing for right now.

I think there is a lot of societal pressure as well telling us that you need to save for retirement. And in turn, that’s exactly what you do. You diligently set up a retirement fund and start investing into it.

It’s not that saving for your retirement is wrong, it’s just that there are other funds that need to take precedence.

This is a common mistake made by many people when they first start saving. They start putting money aside, but life gets in the way and all of a sudden you need that money to pay for an emergency.

It’s not that saving for your retirement is wrong, it’s just that there are other funds that need to take precedence.


There are 4 different types of savings funds:

  1. Petty Cash Fund – $100
  2. Personal Fund – $100 – $500
  3. Emergency Fund – $500 – $1000 (or more)
  4. Retirement Fund – based on income

Each of these funds serves a very specific purpose. The petty cash fund is for things that come up on a daily basis. This can be something as simple as a sale on toilet paper that you would not have been able to budget for or anticipate. Or even, running into a long time friend and going out for lunch. Petty cash is budgeted unexpected expenses.

The personal fund is generally for both planned and unplanned expenses. This can include birthdays, anniversaries, etc. or something unexpected like your car breaking down and needing a tow. Even though it can cover emergencies it is classified as something on a smaller scale.

An emergency fund on the other hand is for something that is completely unexpected and costs more than your available cash on hand in a single month.

Setup your petty cash and personal funds first. Keep the money separate and know what it is intended for. Use it as needed.

Next, start saving for your emergency fund. Add it to your budget so that each month you are contributing towards it until you hit the threshold you have set for yourself. And if something happens and you need to use the funds then immediately start replenishment so that you are either working towards or maintaining the fund.

2. Using your emergency fund for paying bills or non-emergency reasons

I am completely guilty of this. I cannot even tell you how many times I have dipped into my emergency fund when I did not have any money.

I think we all have done this at some point and time. Sometimes it is because you need to pay a bill and your pay check does not come in for another week. Or maybe you have a family birthday and you need to buy a present.

But here’s the clincher. I do NOT want you to feel bad about this. Life happens. You are in a difficult situation. Maybe there is not enough money coming in yet to cover everything (don’t worry this will change). Or maybe no one has ever taught you how to plan this stuff properly. It’s not your fault. Schools don’t teach us about money management. The fact that you are here tells me that you want to learn.


Bottom line, there just seems to be way too many reasons for dipping into that emergency fund.


Setup your petty cash and personal fund as explained in the previous section. This way you have money budgeted for unexpected events so you don’t need to touch the emergency fund.

I have tested a few different ways for keeping this money separate so it does not get mixed up with other expenses. The best way that I have found is to use a prepaid MasterCard. Load it each month to maintain a certain threshold. Use it for those unexpected events and replenish.

3. Failing to control your spending

Who doesn’t love spending money? I think all of us, at least to some degree, love shopping. But spending money even if it is for sale items is hurting your savings efforts.

What are you triggers?

Do you find yourself spending tons of time on social media? Scrolling through the wonderful images on Pinterest. Dreaming about what you would like to buy. How it would make you so happy. Convincing yourself that you cannot live without it…whatever ‘it‘ is in that moment.

Or are you the kind of person that likes to spend time walking around the mall. Visiting the different shops. Window shopping. Dreaming. And then there it is…that jacket, or watch, or purse on sale. And you have to have it…NOW.

Impulse shopping that leads to uncontrolled spending is one of the biggest mistakes you can make that will directly sabotage all of your efforts to save money.


Stop impulse shopping and focus instead on intentional shopping. We’ve all heard the saying ‘he who fails to plan is planning to fail’, that could not be more true in this case.

He who fails to plan is planning to fail.

Winston Churchill

Make a list of what you need to buy and which stores you need to go to. Whether you are using an app on your mobile or writing a gold old fashioned shopping list does not matter. Rather, what is important is that there is intention behind your actions.

When you get to the store go directly to the first item on your list. Then immediately cross it off. Then go to the next one, the next one after that, and so on. Until you have gone through the entire list. And then proceed directly to the checkout. No wandering. No window shopping.

I know you are reading this and thinking that I am being silly, but there is a method to my madness. You see when you cross off the items it triggers dopamine in your brain. Dopamine is the happy hormone. And whenever possible we want lots of it. Why? Because it makes us feel REALLY good.

By the way…it’s also the same hormone that is released when we eat chocolate. Yummy!

So to recap, plan out what you are going to buy, get what you need, cross off your list items and leave the store.

4. Not including savings as a budgeted expense

Each and every month you have a list of expenses. You pay for your rent or mortgage, utilities, car payments, credit cards, etc. etc. You know all these bills because they come to you monthly either in digital or paper format.

Remember to always pay yourself first. You are the priority.

Marion Jones

Have you ever heard the saying “pay yourself first”. I remember when I first got into business for myself. I was very fortunate to have a wonderful mentor and she would always say to me “pay yourself first”. The funny thing is that I never did. I used to think that paying others was more important. Boy…was I wrong!

When you make your budget or allocate what you’ll do with income each month, list saving a set percentage of your income right along with rent and other must-pay bills. Then use the money for these goals first before you do anything with your cash that isn’t absolutely necessary. That way you’ll be certain to save.1


When creating your budget make sure to include savings as one of your expenses. This way it takes on the same type of priority as any of your other bills.

Figure out how much you can afford to invest into your savings per month and that becomes the amount that you expense. Don’t forget to increase this as your earnings increase so that it remains a relative percentage rather than a static number.

5. Manually transferring money to your savings funds

This is a huge mistake and one that is all too common. You decide that each month you will put aside $100 towards your savings, but you quickly find that the money is all gone. It’s so easy to spend what is there or just simply forget to transfer it.

Trying to remember to send money to your savings account is work. It requires effort. And while that may seem to be a small issue, the problem is that other daily tasks will take priority and it just will not get done.


Automate all of your savings. You can do this easily by setting up automatic transfers to your savings account. With most banks you can do this directly from inside your online banking. However, there are still some that require you to schedule an appointment.

Actually, one of the benefits of meeting with someone face-to-face is that they can tell you about all of the options that are available. They can help you decide what is the right choice. You can look together at interest rates, types of accounts, etc.

Plus,the best part of automating your savings is that it all happens without you having to think about it. It’s easy. You don’t even notice and before you know it you have reached your goals.

6. Saving the wrong proportion from your earnings

Are you saving too much or too little? Is there such a thing as too much? What is the right balance?

The truth is that the right balance is unique to your situation and circumstance. However, there are some very good proportions that you can use as a starting point.

Many resources suggest that you should save 20% of your earnings, while others go from as low at 10% to as high as 30%.

Many resources suggest that you should save 20% of your earnings, while others go from as low at 10% to as high as 30%.

According to the popular 50/30/20 rule, you should reserve 50 percent of your budget for essentials like rent and food, 30 percent for discretionary spending, and at least 20 percent for savings.2


You need to create a budget that is ideal for you in your current situation. For example, if you are earning minimum wage then your budget for essentials maybe as high as 70% – 80% of your income. In this case it is totally ludicrous to even consider saving 20%.

You should not be trying to save money if you do not have money to live on. This requires a different solution, whereby you need to strategically start increasing your earnings. In a nutshell, you need to make more money. Stay with me and I will teach you how you can do that in upcoming articles.

For now, let’s just focus on what you need to do today. Figure out exactly what is coming in and what is going out. Your income versus expenses. Then whatever is left over take 20% of that. If it works out to $25 dollars per month then that is what you are going to save. That gives you $300 in one year towards your emergency fund.

You may be thinking that $300 is really low, but it is the right number based on your current circumstance. Remember, this number is individual and unique to your situation. If it’s small then the next step is going to be figuring out how to make money so that it will increase.

7. Not having separate accounts for savings

I actually had two separate accounts for years, a checking account and a savings account. I had setup automated transfers monthly, but I kept finding I needed to transfer money back to my checking all too frequently. I think part of it was that just seeing it there I knew that it was my backdoor in case something came up. And truth be told it seemed like something was always coming up.

To fix this I decided to open a second account at a different bank exclusively for savings. I created an invoice for myself called ‘Emergency Fund’ and each month I would pay it just like I would pay any bill.

Not being able to see the money in the account and not visiting that account regularly really worked. Out of sight, out of mind.


Having a regular savings account is great, but if you struggle with temptation spending like I do then get yourself a second account with a totally different bank. Trust me it works!

You should still have a savings account, but use the one linked to your checking account to build your personal fund. And use the account with a different bank for your emergency fund.

8. Failing to save at all (living in ‘when I…’)

The concept of when I…’ is something I talk about a lot. Make sure to check out some of my other articles to learn more about it. In a nutshell, it means that you have set in place things you want to, or hope to, achieve before you do something specific. For example, when I lose 40 pounds I will start dating again. It is conditional.

When it comes to savings the most common ‘when I….’ statements are:

  • When I get a better job I will start saving for retirement
  • When I get that raise my boss has been promising I will start saving
  • When my business finally takes off I will setup my savings funds

The problem with living in ‘when I…’ is that it means you are doing none of the work today for the end goal. In other words, you are not saving at all.


Identify your personal ‘when I…’ statements. Write them down on a piece of paper.

Forget about typing them on your computer. There is something very powerful that happens when you put pen to paper.

It fires up the brain in different ways.3

Writing with a pen and paper requires more mental energy and engages more areas of the brain than pressing keys on a computer keyboard.

Catherine Pearson – Huff Post

Writing with a pen and paper, “requires more mental energy and engages more areas of the brain than pressing keys on a computer keyboard,” Wade wrote.

The benefit of this is that once you can identify your ‘when I…’ statements you can also re-program your thinking to remove the conditions.

Bottom line…

You need to start planning and setting up your saving funds today. It does not mean that you need to contribute a lot especially if you are in a situation where you do not have money. It is more about getting in the habit of saving.

9. Getting yourself in too much debt

Consumer debt is at an all time high in the United States. According to Experian data, overall consumer debt in the U.S. has grown 19% since 2009 to its current record high of $14.1 trillion.

Retail credit card debt is at a record high of $90 billion.4

That’s insane!

But to me it speaks to a bigger problem rather than just impulse buying. What are the contributing factors? Social media? Societal pressure? Keeping up with the Jone’s or should I say Kardashian’s?

Regardless of what has got you there, it’s time to get it under control. Figure out why you are spending? Is it for retail therapy? Or maybe it as simple as the ease of overspending with a credit card. Whatever it is you need to identify it.


First and foremost, identify why the problem is happening so that you can stop it. And if the issue is bigger than you can handle yourself then reach out for help. There is nothing wrong with getting help. In fact, talking to a therapist is an act of strength. It shows that you care about yourself and that you want to make a positive change in your life.

Secondly, you’ve got to deal with the current debt that you have right now. Create a debt management plan and stick to it. List out everything you owe, including the interest rates. Map out the amount of time that it will take to pay everything off based on your current income.

Next, work on decreasing your monthly budget so that you can allocate more funds to get your debts paid off quickly. And lastly, find a part time job or pick up a side hustle to earn a little more.

10. Resistance to learning how money works

Understanding how money works can be quite challenging, but resistance to learning will significantly impact your ability to save money.

If you really want to save money, if you want financial freedom, then you need to invest the time to learn how it all works.

Money often leads to stress and anxiety and can make people feel powerless or out of control.

Jacob Olesen

But first you need to identify where the resistance is coming from. Is it coming from not wanting to learn or from something directly related to money itself?

Money often leads to stress and anxiety and can make people feel powerless or out of control.5


Whatever it is that is getting in your way work through it. Reading a blog such as this is a great starting place. You are opening yourself up to learning.

Once you break through that resistance a lot of positive things will follow. Your life will become more organized. You’ll stop wasting so much time thinking about money. And most importantly, you’ll stop wasting time worrying about money.


Because once you understand how money works you can create a plan to solve any money problem you may have.

Let’s sum it all up…

I know that saving money is important to you, but for whatever reason you are struggling. Maybe you are finding it tedious, too much work, or just feel overwhelmed by the whole thing.

It’s time to get you on the right track. Start with identifying what are the main mistakes that you are making.

Have you started saving for your retirement, but have altogether forgot about the need for an emergency fund. Or maybe your spending is out of control. And what if you haven’t even starting saving yet.

Start with learning how money works. Once you do this you will be able to solve pretty much any problem that comes your way. Create a debt management plan to get your debts paid off quickly. And if you are really struggling with overspending reach out for help.

If you have yet to start saving identify your ‘when I…’ statements first. Then setup your savings funds. Start with a savings account for your personal fund and a second account with a different bank for your emergency fund. Get your petty cash, personal and emergency funds setup first before tackling retirement. And save only the amount that is realistic for you current situation.

Last but not least, find ways to make more money. Get a part time job, start a side hustle, or maybe even look for a job that pays more. Just remember, growing your earnings will directly impact your ability to grow your savings.

Leave me a message in the chat and let me know how you are doing and if you have other mistakes that either you or someone you know is making let’s add it to the list.

Can’t wait to hear from you.

  1. 5 Savings Mistakes You Should Stop Making Right Now, 5 Savings Mistakes You Should Stop Making Right Now,
  2. How Much Should You Save Each Month?, How Much Should You Save Every Month?,
  3. The Benefits Of Writing With Good Old Fashioned Pen And Paper | HuffPost Life, The Benefits Of Writing With Good Old Fashioned Pen And Paper,
  4. 2019 Consumer Debt Study – Experian, Debt Reaches New Highs in 2019, but Credit Scores Stay Strong,
  5. Fear of Money Phobia – Chrometophobia or Chrematophobia, Fear of Money Phobia – Chrometophobia or Chrematophobia,