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Nearly 63% of Americans don’t have enough money saved to cover a $500 emergency. Although we all know the importance of saving, many people are hurting their finances by going about it the wrong way. Here are 5 money saving mistakes even smart people make.

Mistake #1: Only saving what’s left over

A lot of people spend their paychecks in this order: bills, fun, and then savings. The problem is you’re probably spending too much money on the fun stuff. You can correct this mistake by paying yourself first. In an ideal situation, 20% of your monthly budget will go towards your financial goals, 30% will be spent on wants and 50% will go towards your necessities.

Mistake #2: Linking your checking and savings accounts

Having your checking and savings linked to the same ATM card is convenient, but can lead to overspending since the money can be easily transferred from one account to another. Keep some of your money accessible in case of emergencies but keep the rest in a separate account that isn’t linked to your debit card. Online banks are a good option. They offer higher interest rates than your normal bank and since it usually takes 24-48 hours to transfer the funds, you may be deterred from making unnecessary withdrawals.

Mistake #3: Depending on windfalls to fund your account

Many people use their tax refund to build up their savings. In fact, you can get the biggest possible refund when you do your taxes at ezTaxReturn.com.  Although there’s nothing wrong with saving windfalls, you also need to save money on a regular basis. Come up with a budget to see how much you can comfortably afford to put aside from each paycheck, then automate your savings.

Mistake #4: Saving too much

Yes, there really is such a thing as saving too much money. This happens when you’re so focused on building your bank account that you put your financial obligations on the back burner. Saving is good but your bills need to be paid on time and in full every month to avoid interest and penalties.

Mistake #5: Not maxing out your retirement accounts

You’re not going to work forever. The earlier you start saving for retirement, the more time your money will have to grow. If you can afford it, contribute the maximum amount into an employer sponsored plan like a 401(k), SEP or SIMPLE. Not only will you be saving for retirement, you’ll also be lowering your taxable income. Plus, if your employer offers to match a percentage of your contributions, you’ll be walking away with free money.