Common Mistakes People Make When Trying to Save Money

I think we can all agree that saving money is one of those things we all know we should do.

Spend less than you earn and put away the difference. It’s simple enough (in theory). But is everyone actually doing it?

I think I can give a resounding NO.

Life gets in the way. Bills pile up, unexpected emergencies are everywhere, and before you know it, your savings account gets pushed to the wayside.

If you've ever felt stuck or frustrated with your efforts to save, take a deep breath!

Let’s look at some of the most common mistakes people make when they’re trying to save money. No shame allowed! Instead, you'll walk away with tips for working toward a saving strategy that works for you.

Quick note: This post contains affiliate links, so I may earn a commission at no extra cost to you.

One of the biggest mistakes is setting savings goals that are way too unrealistic. We all want to save thousands overnight, especially when that motivation kicks in.

Maybe you decide to save $1,000 this month. Sounds great! But you normally struggle to save $100.

While the intention is great, if the plan is too ambitious, it can backfire. You miss your goal, get discouraged, and suddenly the idea of saving is defeating.

Instead, start with a plan that’s more realistic. Be specific about what you're saving for. Break it down into amounts you can track. Make sure your goal is doable based on your income.

This is where the idea of SMART goals comes in. You want your goals to be Specific, Measurable, Achievable, Relevant, and Time-bound.

For example, instead of saying, “I want to save money,” try “I’m saving $300 over the next three months for car maintenance.” Way more focused, and way more likely to happen.

Budgeting, or rather the lack of it. A lot of people skip this step entirely. They know they want to save, but they’re not tracking where their money goes. That’s like trying to lose weight…without ever checking what you eat. Or knowing what your starting weight and goal weight are.

You need to know your numbers!

What’s coming in, what’s going out, and what’s left over? There are so many budgeting apps out there now that make this very simple to do. You can literally link your accounts and get a snapshot of your finances in minutes.

Once you know your spending habits, it’s far easier to make decisions that help your savings grow.

Only thinking short-term is far too limiting. Perhaps you’re saving up for a vacation or a new phone. That’s great. But if you're only focused on the next few months, you might be missing out on the bigger picture.

Retirement, emergency funds, investing for the future, those are things that can easily get pushed to the side. The earlier you start, the easier it gets.

Long-term savings may not seem urgent, but they absolutely matter. The goal is to find a balance. Yes...save for the fun stuff, but don’t forget to also stash something for later.

Saving gets a lot easier with a little more coming in each month. My free playbook shows how recurring income works with simple math. Grab it right below.

One of the most underestimated traps is what’s known as the “latte effect.” This refers to small, repeated expenses, like a daily coffee. “It’s no biggie, I get a latte every day as a treat.” But these kinds of repeated expenses add up and slowly drain your money!

Examples might include streaming subscriptions you forgot to cancel, or the food delivery that happens one too many times a week.

Again, these little expenses seem harmless, but over time, they stack up.

Cutting back can be as simple as paying attention. You can still order the latte! Look at your daily and monthly spending and see where your money's going.

You might be surprised by how much you can redirect to your savings without feeling like you’re missing out.

Then there’s lifestyle inflation. It’s when you start earning more money (yay!) and, instead of saving that extra income, you just spend more (boo!).

Maybe you upgrade your car, upgrade your wardrobe, or move into a pricier place. The problem is, even though you’re making more, you’re not actually keeping more.

You’re stuck in the exact same cycle!

You can, and should, absolutely enjoy your success. But if every raise leads to more spending, your savings never really grow.

Instead, make it a habit to save a portion of every pay increase. Like 10% of your take home always goes to savings. That way, your lifestyle can still improve, but so does your financial stability.

Another mistake is relying too heavily on credit cards while trying to save. Credit cards do have their benefits and advantages, but if you’re constantly charging things and only making the minimum payment, you’re not really saving.

You’re just building up debt that eats away at your financial progress.

High-interest debt can literally wipe out months of hard work.

If you can, pay off your balance in full each month. Use your card like a debit card, only spend what you already have. That way, you can still earn rewards or points without falling into the debt trap.

More than likely you need to spend money on something. Groceries, gas, entertainment, phone service, etc. But a lot of people don’t bother shopping around or comparing prices. They grab what they need without checking for deals, discounts, or better options.

And while convenience has its place, over time, this can cost you. Especially with recurring purchases like groceries, toiletries, or household goods.

Price comparison apps can help with this, and so can buying in bulk or switching to more affordable alternatives.

You don’t have to hunt for every single deal or become an extreme couponer. But if you’ve been a long-time customer, it might not be a bad idea to call and request a loyalty discount.

Being mindful in this area can stretch your budget a lot further.

That said, chasing the cheapest option every time can also backfire. There's a difference between being frugal and just being cheap. Buying low-quality stuff just because it costs less can end up costing you more in the long run.

If you keep replacing the same item over and over, it might have been smarter to invest in something that lasts. Think about the value along with the price tag. If you’re buying shoes, appliances, or even furniture, sometimes quality really does matter.

Spend a little more upfront for something that won’t break or wear out in a few months.

Emergencies happen to everyone. Yet not everyone has an emergency fund. One mistake is to focus on savings goals that are fun or rewarding, like a vacation, a new gadget, or even a home project. But an unexpected expense can throw you completely off track without a safety net in place.

Common examples of emergencies are car repair, medical bills, or income reduction/job loss. Having an emergency fund keeps you from turning to credit cards or loans in a crisis.

A good rule of thumb is to aim for three to six months' worth of living expenses. It might take time to build up, but it’s worth it. Even having $500 is a great start. And if you'd like an extra income stream to help it grow, take a look at the <a href="https://incomesuccessstrategies.com/tripleresidual" target="_blank" rel="noopener">Turnkey Residual Income System</a> I use.

At the end of the day, saving money comes down to getting clear on your habits so that you have more flexibility.

Are your goals realistic? Do you know where your money is going each month? Are you preparing for the long haul, or just the next few weeks?

If any of these mistakes sound familiar, that’s totally ok! Use them as a chance to grow.

And if you’d like a simple plan for adding recurring income, grab the free playbook above.