The 9 worst bits of savings advice we've *ever* heard

Posted February 2021

worst savings advice

Not all financial advice is created equal…

If you’re struggling to save, there’s a fair chance you’ll give any tip or trick a try.

Unfortunately, there is a lot of bad saving advice out there. Especially on the internet!

That’s why today we’re going to save you some cash and save you from making some of the most common mistakes people make with our list of the worst bits of savings advice we’ve ever heard.

This includes:

  • You should only save for retirement when you’re older.
  • Student loans and debts? Forget about those!
  • The best place to save your cash is under the floorboards.

Let’s start with when you should start to consider your retirement...

1. Don’t save for retirement until you’re older

save for retirement

Retirement isn't something you wait until you’re older to start saving for. In fact, leaving this too late in life may leave you struggling to make ends meet as you'll have too little to comfortably retire on.

Unfortunately, research shows that nearly a third of Kiwis still working past the age of 65 say they have to do so to pay the bills. That’s a little scary!

So the earlier you start saving, the better. You'll give yourself the best shot at achieving financial independence by the time you knock off work on your last day.

2. Put away the majority of your wages

This may sound like a good way to save…

...that is, until you dive into your savings account because you didn’t budget enough!

Break into the piggy bank once, and it's easier to do so again and again until you're stuck in a downward spiral of bad savings habits. Could you throw those unbudgeted expenses on your credit card?

Of course you could! But you’ll end up paying more in the long run as you continue to rack up debt. Ultimately, it’s worth saving a little less if it means you can afford those regular expenses.

3. Carrying a credit card balance is a good thing

credit cards

This piece of bad financial advice traps a lot of people!

Credit cards are a great convenience because they allow you to borrow money when and where you need it, while paying it back over time. Doing so is said to build a good credit score, as it shows you’re good with money.

However, this can be a dangerous concept. If you don’t manage it well, it’s all too easy to overspend and be left carrying a balance on your credit card. This can stack up, and fast!

So while it can be an effective method for improving your credit score, carefully consider whether keeping a credit card around is the right choice for you and your spending habits. And if you're already struggling with credit card debt? Consider consolidating to help lower your repayments.

4. Don’t worry about student loan debt

A lot of Kiwi students take out a student loan without considering the added costs of course-related materials, accommodation, and other study expenses. That’s why it pays to only borrow what you really need, as this can stack up over three or four years.

If you’re finding it difficult, you might want to consider taking on a part-time job or a side hustle while studying in order to ease the financial pressure and give you a little money left over that you could put into a savings account.

As we’ve found, it’s never too early to start planning for your future.

5. Don’t save until you’re out of debt

save or pay off debt

Of all the bits of bad savings advice, this one might take the cake!

We understand that it may seem impossible to save any money while you are paying off bills such as personal loans, car loans or credit cards, but if you start by setting small savings goals that you will be able to stick to, this will ‘start the ball rolling’.

Once you see small amounts going into your savings account each week, it will start to stack up and give you the motivation you need to save even more.

6. Hide cash at home

Storing your cash under the mattress may seem like a great idea…

...after all, you can’t lose anything on it!

But while it may not be at risk of fluctuating interest rates, there’s still the threat of fire, flood, theft...the list goes on. Not to mention you know exactly where it is, and can access it at any time.

Depositing your savings into a bank account is a much better way to keep your cash safe while earning interest. You can even make that savings account ‘view only’ so you can’t touch it at all without visiting a branch.

7. Only save 10 percent for your retirement

saving ten percent

This one’s bad from start to finish.

If you thought you were just going to reach 65 and retire with no savings and rely on superannuation...then chances are you’ll be disappointed. Superannuation pays $632 each per fortnight for a married couple.

However, it’s reported that a married couple needs to be bringing in at least $1,015 to live on a budget that gives you the freedom of choice. Choices like traveling at home or overseas, or a nice meal out with the family.

According to Statistics NZ, the average retired couple currently has $60,000 in savings. With the average woman living 21.3 years past retirement, and men 18.9 years, it pays to not bet on being able to solely rely on superannuation.

8. Just save whatever is leftover at the end of the week

If you’re like most Kiwis, chances are waiting to see what’s left...won’t leave you with much. That's because it’s all too easy to spend whatever is left in your account at the end of the week.

After all, you did work awfully hard for it.

While you can’t save what you don’t have, setting yourself a goal to work towards each week will make you more likely to stick to your shopping list or skip a few of the extras to reach it.

It’s this kind of commitment that you need to reach those lofty savings goals!

9. Put all of your investment eggs into one basket


Investing is a great way to grow your money, but there isn’t a single option out there that you should be putting all of your hard -earned money into. It just doesn’t make sense.

Diversifying your investments is a safer way to save. Perhaps it's a savings account? Or a fixed-term deposit which offers a far higher return? Either way, exploring many different options is a great way to maximise your savings.

Lastly, one final piece of *good* savings advice

Between rent, utilities, groceries, costs of running a car, pets, kids, and whatever else you may be forking out for each can be hard to set money aside at the end of the month.

The key to success is cutting yourself a break and starting small. Those dollars all add up.

It just takes one step - or, rather, cent - at a time.

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The article published on this page is not financial advice and should not be relied upon as such. The opinions published in this article is not those of Unity Credit Union.