Tjoo 😂 8 of the Worst Ways To Deplete Your Savings

Tjoo 😂 8 of the Worst Ways To Deplete Your Savings

Leave your savings for true emergencies.

There are lots of reasons you might have to tap into your savings that are reasonable. Unexpected medical bills or home repairs, covering daily needs if you lose your job, and so on. Sometimes, we find ourselves in dire straits and have no choice but to use our savings to cover these expenses.

But using your savings can become a problem when you use it for things that aren’t so essential. In general, savings should be spent in an emergency, and not anytime you happen to need some extra cash.

Financing a New Car

We all love the new car smell, don’t we? But if you use your savings to make a down payment on that amazing new car that was just released, you are probably making a mistake. “This is one of the worst ways someone can make their savings disappear,” said Cameron Burskey, managing director at Cornerstone Financial Services. “Not only are you adding a car payment, but you’re also having to pay interest on the financing, as well as increasing your monthly or annual insurance costs.”

Buying More House Than You Can Afford

It’s nice having a house with a big yard or one that’s in a better area with better schools. And maybe you can tap into your savings to make a down payment. But if you can’t afford the monthly mortgage payment, you could quickly be headed for financial turmoil. There are plenty of calculators available to help you decide how much house you can afford, such as this calculator from Chase.

Expensive Trips

First, it’s worth mentioning that taking a vacation is often a good idea. Burnout is real, and sometimes you need a break. But it can become a problem if, say, you are tapping into savings to cover a trip to an all-inclusive luxury resort. If you want to take a fancy trip, start a separate savings fund you’ll use to cover that trip. Put money into the fund when you can — but don’t neglect your retirement and other savings funds in the process.

Risky Investments

Risky investments tend to be those that promise outlandish returns, typically many times more than the average stock market return. Such eye-popping returns can undoubtedly be tempting, but that doesn’t make them good investments. Never invest more than you can afford to lose — and if you are drawing money from your savings, that’s probably money that is better left in a safer place.