Here are three widespread savings myths that are derailing your goals and how to stop them.

Saving money is already hard enough. The threat of misinformation just makes it harder. I want to reveal three surprisingly popular myths that keep you from reaching your savings potential, and then provide you with a few ideas about how to really ramp up your savings game.

Saving is one of the most important financial habits you can build. It allows you to be master of your money, prepare for future developments, and remove stress from your life. Start now, thank yourself later.

Myth #1 – You Have to Spend Money to Save Money

There a hundreds of websites and advertisements dedicated to “ways to save money” on just about everything. The only catch is, you have to buy something to realize these “savings.” Although it doesn’t necessarily prevent you from putting money aside, it’s worth a mention here because spend-to-save schemes are super common and usually result in spending more than you normally would.

The cliche line usually goes something like: “you’re going to buy this thing anyway, pay a little more and get two,” “get this thing that you might use at a discount with our coupon,” or “you can’t pay off your mortgage because you’ll lose the tax write off.” But why spend two dollars to save one? You’re still on the other end of the transaction with a dollar less than you had before. Stick to your guns and only buy things you will use.

This is not to say don’t take advantage of discounts, but these gimmicks are usually meant to entice you to change your purchasing habits or remain in debt. Yes, mortgage interest is a tax write off, but if you own your house you’ll have more money available to contribute to causes you actually care about – and still get the tax break.

Bottom line – only buy what you need, be as thrifty as you can right now, ask for discounts, and for the love, pay off your dang house.

Myth #2 – Saving is What You do With Left-Over Money

Unfortunately, this only leads to non-prioritized saving and poor results. If you discover that you have an excess at the end of the month/week/year by all means save some of it, but waiting til the end to do it doesn’t let you choose how much you want to save. In this case, you’re not the one in control, you’re letting your money dictate how you behave.

In order to really save like you mean it, you have to “pay yourself first” then let the chips fall. Nailing your saving goal for the month right away is a huge confidence booster, and you’ll see results a whole lot faster.

I once read about a young entrepreneur who was SERIOUS about saving. His strategy was to save what he wanted before any other payment, even before paying his employees. The pressure to earn enough to pay his operating costs motivated him to work extra hard to earn more business each and every day.

The lesson here is that saving has got to be a major priority. Otherwise life will get in the way and it will simply never happen.

Myth #3 – Not Spending is the Same as Saving

This one could be the most subtle and dangerous myth on this list because it is really close to being true, but not quite. People who believe this are probably doing a great job at reducing their expenses (the first key to wealth), but they are still not making saving a priority.

Not spending isn’t the same as actively putting money aside on purpose. You might be accumulating money, but it is a byproduct of a separate behavior. I’ve fallen into this trap many times, seeing my bank account rise each month, but not because I was purposeful about it. “Unspent” money is great, but it is not saved money.

If you’re not actually moving your savings to a separate account, envelope, mattress, cave, etc. it means you’re great at resisting the urge to spend right now, but still need to build the savings habit. It’s awesome to see your checking account grow, but it’s even more awesome to maintain a workable balance and see your savings soar.

How to Really Save Money

People who are great at saving and growing money know that you must act to make it happen. My recommendation is every time you get paid, or every time you do your cash flow plan, designate how much you want to save to reach your goals and immediately move it into a savings account. You can even set this up to be done automatically through your financial institution if you wish. I like to write myself a check because it feels like I’m paying myself. I guess I’m a little weird like that.

To figure out how much you need to move, make a saving goal. Think about how much you’ll need to save to do the things you’ve been thinking about. Divide the amount by the number of months or paychecks, and you have an amount you can move to savings. For example, if you want to replace your car in two years and go on vacation in 9 months, decide how much money you’ll need to do those things. Let’s say you want to buy a $4,000 car and go on a $2,500 trip. $4,000 / 24months = $167 per month and $2,500 / 9 = $278 per month. $167 + $278 = $445 needed per month. Move that much into your savings account at the beginning of each month, and never worry about missing a savings goal again.

Another way to do this is to set a percentage of your income that you will dedicate to setting aside for the future. Those new to savings or those with lots of debt payments might consider saving a conservative 5-10% of their income. For those who are debt free, shoot for an aggressive number like 20-60% and watch your savings explode. We’re currently saving 40%, and our goal is 60%.

Consistency is the key here. Steadily saving 10% of your yearly income will beat saving 50% of two paychecks. That is why saving is a habit that you must develop. Work it into your routine, hold onto spare change, account for it in your budget, but most of all, keep doing it, week after week, month after month. Results will be amazing.


There you go! Saving is not a passive process, you must actively move money in order to save it. You can even think of it as a “spending” category since a transaction is needed. Active saving is the only way to make absolutely sure that you will meet your goals, because saving doesn’t “just happen.” Save first, save often.

Until next time,
Do Brave Deeds and Endure!
– Ben at Debt Freeks

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