Many Americans are looking to save money, but their efforts are focused in the wrong place.
Cutting out that daily $4 latte isn’t the kind of saving that will make you rich. If you’re not using high-interest savings accounts or you don’t get rewards from your credit card, then you’re not maximizing the money you could be saving.
If you’re trying to get rich, leaving money on the table won’t help you reach your goals. To make the most out of what you have, you need to use all of the resources available to you.
To get started, if the interest rate in your savings account isn’t keeping up with inflation, this is the first area in which you’re leaving money on the table. There are now so many options when it comes to banks, but recent data suggests that Americans are more loyal to their banks than they are to most other businesses. The thing is that banks are far from equal, so if you don’t want your money to just waste away, shop around for better savings accounts.
When it comes to credit cards, interest shouldn’t be the first priority. If you have a safe income and you’re being financially responsible, you shouldn’t often have to pay more for a credit card. Some of the most basic rewards that will make your money work for you are cash-back rewards. If you travel often or have other priorities in your life, there’s a credit card with rewards that’ll help you save in those areas.
Next, if you want to think long-term you can’t neglect your 401(k). If your employer offers to match your 401(k) contributions, not taking them up on the offer would be to leave a lot of money on the table. Taking advantage of tax-advantaged retirement accounts is critical to the long-term financial game. This is why it’s also bad to just sit on your savings if you’re trying to improve your economic condition. Leaving money sitting in a savings account, even if the interest is great, also constitutes leaving money on the table if you don’t take advantage of tax-advantaged retirement accounts or investments.