5 Roadblocks to Saving More Money

Saving money is never easy, but did you know you could actually be sabotaging yourself? To get on track with your finances, here are the top five money-saving mistakes to avoid:

You don't have an emergency fund—The quickest way to drain your savings is to not have an emergency fund. When disaster strikes, and you're not ready, you often have no other choice than to use a credit card and go into debt.

Experts recommend saving three to three to six months' worth of expenses—just in case.

You're not maximizing your savings—A traditional savings account is fine—certainly better than no savings account at all! But why not use something that makes you more money? In your quest for financial security, you've likely heard of something called a certificate account—but you may not be clear on what it is. A certificate account is a short-term savings account. It’s similar to retirement savings accounts because you can't access the funds before a certain amount of time has passed without a penalty.

These accounts are attractive because they usually offer a higher, guaranteed interest rate above that of a traditional savings account, meaning your money can grow faster. And, there are all different terms available—usually from 6 to 60 months.

You're not tracking your money—A crucial part of saving is being aware of every dollar that goes in and out of each of your accounts. That means making a list or spreadsheet that you update and analyze daily, weekly, monthly and annually.

While that may sound intimidating, you may have a tracking system available right at your fingertips. Check with your financial institution—they may offer money management tools to help with the process. You’ll likely be able to track your long-term savings goals, monitor all your financial accounts, visualize your spending habits, track your net worth month-to-month and more.

You're paying your debt wrong—Paying off debt efficiently is crucial to your financial success. You don't have to pay it all immediately, but you can take certain steps to pay it off more quickly and with as little interest as possible. There are several pay-off strategies around but many money experts recommend the snowball method. Start by ranking all your debt accounts in order of interest rate, from highest to lowest. Then prioritize the account(s) with the highest interest rate, paying as much as you can afford while still paying the minimum on all your other debts. As debts are paid, roll that payment into the debt account with the next-highest interest rate. And so on.

If your debt is credit card-based, consolidate as much of it as possible. Look for a card with a lower or 0% annual percentage rate for as long as possible to allow yourself time to pay off the debt before interest comes back into play.

You're saving without a clear goal in mind—One of the most important things you can do to stay motivated to stick to your budget is to determine your “why.” Why is having money in the bank important to you? What is something you are hoping to achieve? Why is it better to feel financially secure than to survive paycheck-to-paycheck?

Once you figure out why you want to be financially secure, saving money will become much simpler.