Saving money is a good thing, but savings alone will not make you wealthy. It is what you do with your savings and what you don’t do with it that makes the difference.
The main reason for having a savings is to gain financial freedom, which is why you must never dip into your savings.
Here are things you should never do to your savings.
1. Spend it
It is very easy to spend money these days, even without having cash. With just an ATM card, you can spend money anywhere.
This should be different with your savings. You should not spend what is in your savings at all. Until you have reached the saving limit you planned to achieve.
2. Loan it outs
Never loan out money from your savings to family members or friends. You can loan out money from another money source but not from your savings.
Yes, they are family, they are friends, they are friends of a friend, but you don’t know their ability to pay you back. So don’t take the risk.
There is always a chance that you might not get it back, so don’t loan out money from your savings
3. Invest in what you have no idea about
You need to know some things before investing. Don’t gamble in your savings by investing in something you have no idea about.
If it sounds too good to be true, then it might be very risky to try. Your savings are meant to grow on its own with an effort from you. Don’t be greedy and start looking for ways to double your savings. It just might not end well.
4. Give it out
It is good to be generous but you should not give out your savings all in the name of generosity. Wait till you are financially secured before you think of being a philanthropist. Build your wealth first and then you can contribute to the society.
5. Leave it for so long in a savings account
It’s good to save and all but putting your savings for too long in a savings account without doing anything meaningful with it is not the best. Especially with banks that pay very low interest on savings. Find profitable things you can do with your savings when you have enough. The real value of money would have gone down in few years because of rising prices.