Common mistakes when saving up money

Hinzugefügt: 2026-06-07

[00:00:00]Well, we know a lot of families are trying to save money anywhere they can, but there's some common mistakes that could be keeping them from getting ahead financially. So, here to break down what they can do, how to avoid those mistakes, are money and business expert Derek Kenny. Derek, thanks for joining us this morning and you've said before that a lot of times people treat their tax refunds like a bonus. They go on a little shopping spree. That could be a mistake.

[00:00:26]>> It's a big mistake, Chris. First of all, great to see you. So many people think of their tax refund as this gift from the government, but what you've done is you've taken too much out of your paycheck, told the IRS you use it better than probably I could, and then you get it back. So, you're wasting possible interest. For example, if you get back $3,000 at let's say 10%, that might be $300 you're missing out on. You want to go to your human resources department, let them know I want to adjust my tax withholdings, have less taken out, then you got more money to use now and possibly save, so your money works harder for you.

[00:01:05]>> The term free money makes us all perk up, and you say people could be missing out on free money in their 401(k)s.

[00:01:13]>> This is one of the simplest mistakes people make. So, when you go to sign up for your 401(k) or it might be a 403(b) if you work for a nonprofit, often times as an incentive to reward you for participating and to help keep you as an employee, they provide a match. So, let's say you put in 4%, Chris, and then they match it with 4%. So many people maybe put in zero or 1%, they miss out on the match. I tell people at least put in what they put in, so you're taking the free money. Don't don't step over dollars to pick up pennies.

[00:01:48]>> So, when we talk about investing, another mistake that you see people waiting to invest only if they have some money left over, but they shouldn't do that either.

[00:01:57]>> Common common mistake. Here's the problem though. Typically there's more month left than there is money. I think most people can relate to that. You want to treat investing and saving like a bill.

[00:02:08]First of the month, you give, you save, you invest, and then live off the rest.

[00:02:13]If you wait until the temptation comes of do I go out with friends or do I save into my savings account, you're going to go out with friends and not save any money. So, you want to make it also automatic, so it's what I call set and forget.

[00:02:27]>> That's some great advice there. And finally, you say one of the biggest mistakes is just not having a financial goal. So, why does it matter so much to have a goal we're working towards?

[00:02:37]>> Well, imagine you're in the minivan and you're taking your family on vacation, but you tell them, "Hey, I don't really know where we're going. We'll just see where we end up." You're going to have some frustrated kids, okay? So, what I find is once you set even one financial goal, "I'm going to pay off $2,000 of credit card debt." Suddenly now you're focused on achieving that goal. And what we find is surprisingly people begin to eat better, get in better shape, they begin to have a better life when they're focused on one goal because they see progress and it builds confidence, and they often have more cash as well.

[00:03:14]>> I always love the analogies, Derek.

[00:03:16]Thank you so much for joining us on Daybreak this morning.

[00:03:19]>> Oh, my pleasure. Thank you, Chris.