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Everyone should know that, as important as earning money is, saving it properly is equally important. But sometimes, certain mistakes hinder your savings and shatter your dream of financial freedom. In 2025, with rising inflation and expenses, saving has become even more difficult. So, let's explore the five biggest mistakes that hinder savings and how to avoid them so your money stays safe and grows.

5 Big Financial Mistakes for Savings
1. Not Making a Budget

Mistake:
Many people don't keep track of their income and expenses. Without a budget, money is spent on unnecessary things, such as frequent dining out or shopping.
Disadvantage:
A large portion of your income disappears, leaving nothing for savings.
Prevention:
Create a monthly budget and follow the 50-30-20 rule.
Example:
If you earn ₹50,000, set aside ₹10,000 for savings.

2. Putting savings last

Mistake:
People spend first and try to save whatever's left, but most of the time, nothing is saved.
Damage:
Expenses increase, and savings remain zero.
Prevention:
Save first, then spend. As soon as you receive your salary, put 10-20% of your money into a savings account or investment. Set up automatic transfers so that money is saved automatically.
Example:
Out of a ₹50,000 salary, put ₹10,000 into a SIP or RD.

3. Excessive Debt Use
Mistake:
Overusing credit cards, EMIs, or loans. People take out loans for a new car, phone, or vacation.

Disadvantage:
Debt interest eats into your savings. For example, credit card interest can be 36-40% annually.
Precaution:
Take out loans only when absolutely necessary. Pay your credit card bill on time and avoid unnecessary EMIs.
Example:
Save money first to buy a new phone, don't take EMIs.

4. Not creating an emergency fund
Mistake:
Not saving money for unexpected expenses (such as a medical emergency or job loss).
Disadvantage:
You may have to take out a loan during such times, which further reduces your savings.
Precaution:
Create an emergency fund equal to 6 months' expenses and keep it in a savings account or liquid fund.
Example:
If your monthly expenses are ₹30,000, create a fund of ₹180,000.

5. Not investing
Mistake:
Keeping money only in a savings account or not saving at all. Savings accounts earn 3-4% interest, which is lower than inflation (6-7%).
Disadvantage:
Your money depreciates over time because inflation reduces its value.
Prevention:
Invest your savings in mutual funds, PPF, or fixed deposits; mutual funds can yield 10-12% returns.
Example:
Investing ₹5,000 every month in a SIP can grow to ₹25-30 lakh in 15 years.

Impact of Savings Mistakes
Low Savings:
Lack of a budget and excessive spending can actually drain your money.
Debt Trap:
EMIs and credit card interest can trap you in debt.
Financial Stress:
Sudden expenses can cause stress due to a lack of an emergency fund.
Worry about the Future
: Without investments, you won't be prepared for retirement or major goals (such as a house, children's education).

Easy ways to increase savings
Automatic savings:
As soon as your salary arrives, put 10-20% of your savings into a savings account.
Take a look at small expenses:
Cut down on daily coffee, taxis, or subscriptions (like Netflix).
Save tax:
Get a tax deduction of up to Rs 1.5 lakh through investments like PPF and ELSS.
Start investing:

Start investing small amounts in SIP, FD, or PPF.
Advisor's advice:
Speak to a financial planner and choose the right investments.

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.