5 financial mistakes to avoid if you want to save

Pay attention to these tips from a specialist if you want to save.

The tips are from an American personal finance expert, Yanely Espinal, shared with the Notícias ao Minuto, and mention the most common financial mistakes to avoid in order to save money.

According to the article by the specialist on the American radio NPR, one of the mistakes is "thinking that a loan is free money". This is because the lenders "are running a business and will make a profit", as with "such high interest rates" the amount "to be paid is significantly higher than the amount borrowed".  

Therefore, before choosing the loan, it is necessary to "seek the best deal" to compare and choose the best conditions that the market can offer you. For this purpose, you can, for example, use a credit intermediary like Poupança no Minuto that helps you throughout the process (at no cost), mediating communication and bureaucracy with the banks, to reach the best proposal.

Another very common mistake is committing to be a guarantor of a loan, since "you are agreeing to be responsible for someone else's debt", and in case the borrower does not pay, you have to reimburse the amount. This factor can also make it difficult if you want to apply for your own loan.  

To save money, you should “put your money in a high-yield savings account,” according to the expert. This instead of keeping the money in a traditional savings account, because “it is likely to be earning little or no interest.” “Putting your money in a high-yield savings account is an easy way to grow your savings,” she explains.

In addition, one must also pay attention to the tendency of " spending more when earning more ". "People think that a higher income means they have to live a lifestyle compatible with that income." In these cases, "expenses are eating into savings." Therefore, "if you are earning more money, your savings rate should also increase," warns Espinal.

Finally, be careful with the mistake of "making investments based on advertising." You should not invest "in what is trendy at the moment, like individual stocks, instead of investing money in something less risky."  

For more savings tips, stay up to date with the weekly newsletter from Poupança no Minuto or contact a credit intermediary directly if you need their services.