So you save some of your paycheck, contribute enough to get your company’s 401(k) match and wouldn’t dare miss a payment on your student loans.
Nice. You’re on your way. But your journey might be longer—or harder—than it has to be. Because while smart steps like these will help you eventually reach your goals, there’s a good chance it’ll take longer than if you applied a little more strategy.
Want to travel a less painful path toward wealth? Make sure you’re not committing these common (and well-intentioned) mistakes.
You’re nickel-and-diming yourself.
You calculate how much you’re spending on happy hours and Shake Shack, then ban them for the sake of your budget. Your head’s in the right place, but your strategy is misguided if you’re striving to save $15 a week by cutting something you enjoy, but still paying $100 more than you need to for cable or $200 a month on a gym membership you haven’t used since January.
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“Not only will little budget tweaks not get you very far in terms of your overall savings, but they may bum you out, which will cause you to burn out,” says Dominique Broadway, a financial planner in Washington, D.C., making it tough to stick to your budget.
Instead of looking for small-ticket items to skip, start with the big stuff. Can you renegotiate your gym membership? It can’t hurt to ask. Are you paying too much for your phone plan? You may save hundreds over the long run by downgrading your data plan, asking about specials or switching to a competitor.
You’re putting money in a savings account, but not investing.
It seems like a smart move to transfer money from checking into your savings account each month—and it is. But it’s not enough to ensure a comfortable future.
Banks are paying an average of 0.5 percent interest annually on a savings account now, but the inflation rate is above 1 percent (and, over the long term, it’s averaged more than 3 percent annually). “So by simply putting money in a standard savings account, it’s almost like you’re losing money,” says Broadway.
An easier way to grow your money and take advantage of compound interest? Once you have at least three months’ worth of expenses in an emergency savings account, start investing leftover cash, says Mary Beth Storjohann, a San Diego-based Certified Financial Planner and founder of Workable Wealth.
Aside from retirement accounts, you can open a traditional brokerage account or keep it simple with an app like Acorns or another automated investment service.
You’re only contributing enough to get your company’s 401(k) match.
It’s easy to think you’ve got your long-term savings covered if you’re contributing a few percent of your salary each year and taking advantage of your company’s free match.
“But the amount that your employer will match should be the minimum you contribute. It’s important to remember that it’s not tied to how much you’ll actually need to save in order to be comfortable in retirement,” says Certified Financial Planner Cheryl Sherrard, director of financial planning at Clearview Wealth Management in Charlotte, N.C.
The average match is capped at around 4.5 percent to 6 percent of employees’ salaries—and not all matches are dollar for dollar. Advisors typically recommend contributing 10 to 15 percent of your salary (including match money). One relatively painless way to get there is to increase your contribution each time you get a raise.
You diligently pay the minimum on your debt each month.
When you’re in debt, it can seem tough to tack on any more than what you need to pay each month. Yet paying no more than the minimum required may mean you’re not actually making a dent in your balance because of interest accruals. “Depending on how much debt you’re in and the interest rate on the loan, you could make minimum payments for a year or more, and your debt won’t change at all,” says Storjohann.
Wipe out your debt—and start building positive net worth—faster by taking a hard look at your outstanding balance, interest rates and other habits. “Maybe you’re over-saving and could be putting some of that money toward your debt,” Storjohann says.
Even throwing an extra $10 a week against your debt can make a big dent in how long and how much you end up paying on it.
You’re saving consistently, but without a clear goal.
“Without goals, it’s harder to have a clear sense of where you stand, and your efforts will be less focused as a result,” says Storjohann—and probably less successful.
The more focused you are, the better your chances of reaching your goal. That means pricing out specific short-term goals and figuring out how much you need to save to reach them. You might also set up separate savings accounts and name them for each goal. Experts agree this can help you track your progress, and remind you of what you’re saving for, which can help keep you motivated and, ultimately, help you reach your goals faster.
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This post originally appeared on Grow