5 Savings-Destroying Habits to Break in 2023

If you struggle with saving money, it may be time to change your financial habits.

If your goal is to save more money this year, you may want to look at your current habits to see if it's time to make some adjustments to your habits so you have more success reaching your goals. Many of us regularly overspend without realizing it because we make the same financial choices repeatedly. You may be able to free up some of your income to save more by altering your current habits. Here are a few to break in 2023.

1. Not monitoring your spending

It can be too easy to overspend when you don't track your spending or follow a budget. You may think that a small unnecessary purchase isn't a big deal, and if it's an occasional splurge, it may not be. But when you repeatedly buy things without considering your budget, those purchases can add up and negatively impact your personal finance situation.

If you want to get better at monitoring your transactions, budgeting apps make it easy to track your spending and set spending limits. Over time, you'll see what habits need to be changed, and you can adjust your budget accordingly to save more money.

2. Not paying your credit card balance in full

If you use credit cards, make sure that you pay your debt each month. When you carry a balance, you'll have to pay interest. Most credit card interest rates are high, making it easy to accumulate debt quickly. It's best to pay your entire balance monthly to avoid extra fees. If you've been paying credit card interest fees, you're wasting your money and making it harder to reach your savings goals because you're handing your money over to your card issuer.

3. Not automating your savings

Many people want to save more, but don't because one of two things happens:

1. Life gets busy, and they forget to transfer money to their savings account.
2. They spend more money than they realize and don't have enough extra money left to save after paying their bills.

If you relate to either of these situations, now is an excellent time to put your savings on autopilot. You can set up automatic transfers so that money from your checking account is transferred to your savings account on a regular basis. This way, you never forget to save. Treating your savings like a bill is a fantastic way to ensure that you stick to your goals.

4. Not planning your spending before you shop

With today's higher living costs, overspending is easy if you don't plan before entering the store. Whether you're headed to the grocery store or running other household errands, it's wise to review the retailer's sales flier and make a shopping list, so you stick to your budget. Otherwise, you may fill your cart with expensive items you don't need or miss out on discounted buys that are a better fit for your wallet. Making a plan before you shop can help you waste less money.

5. Not keeping your savings in a HYSA

Keeping all your savings in your primary bank account isn't ideal because most checking accounts don't earn interest. By keeping extra cash in a savings account, you can earn interest on your contributions. High-yield savings accounts pay out higher rates than many standard savings accounts, so don't miss out on the opportunity to boost your bank account balance.

If you're not saving as much money as you'd like, you're not alone. Changing some of your financial habits may allow you to waste less money and maximize your savings potential. You'll feel more prepared for unexpected emergencies when you have savings set aside.