As a fourth-year college student, I’m still relatively new to managing my own finances. At first, just opening a bank account – or multiple, in my case – was enough of an accomplishment. I didn’t really think much about where my money was going or what it was doing as long as I’d put it in a bank account. After a few years of experience, speaking with others, and reading up on personal finance, I noticed a few mistakes that I’d been making, and that are likely common mistakes for first-time savers!
1. Opening accounts without having a plan
At one point, I became fascinated with banking products. Every time I learned about a new account, a promotional offer, a sign-up bonus, a new feature, or even the look of a card (yes, I’ll admit this), I found myself thinking, “maybe I should open that too”. Eventually I understood why people joke about collecting bank accounts like Pokémon cards. The problem wasn’t having multiple accounts. The problem was that I didn’t always have a reason for opening them. People naturally want to optimize everything. Better rates, better rewards, better features.
There is absolutely nothing wrong with having multiple accounts. In fact, many financially organized people do exactly that. Some have one account for spending. One for emergency savings, one for long-term goals, one for investing, and so on. The difference is that every account has a purpose. One question I now think is useful before opening any new account is: “What job is this account supposed to do?” If there is a clear answer, then the account might make sense. If there isn’t, it may simply create more complexity than value.
2. Leaving extra money sitting in a chequing account
Looking back, this was probably one of the first mistakes I made. Like many students, I had one bank account and everything happened there. My paycheques were deposited into it, bills came out of it, and any money I managed to save stayed there too. At the time, I genuinely thought that was what saving was. If I wasn’t spending the money, then I was saving it. Simple. The problem is that many chequing accounts earn little to no interest. While the money is technically safe, it isn’t really doing much. One of the biggest lessons I learned was that saving money and storing money are not always the same thing.
Another issue is that when all your money sits in one account, it becomes harder to tell what is actually available to spend. If your emergency fund, spending money, and savings goals are all mixed together, it can be easy to accidentally dip into money that was supposed to stay untouched. Something that helped me was separating money based on purpose. Having one account for everyday spending and another for savings created a mental barrier (in a good way). Suddenly my savings felt like savings instead of just extra money sitting there waiting to be spent. Even small amounts moved regularly into an account dedicated to savings can make a difference over time.
3. Chasing promotional rates without reading the details
The first time I saw a bank advertising a promotional savings rate that was significantly higher than what I was earning, I was immediately interested (pun not intended), as most people would be. You see a big number advertised and think, “wow, that’s a really good rate”. And it usually is. However, this is one of the most common topics discussed in banking forums for a reason. Many people focus on the promotional rate itself without paying attention to the details behind it. Some promotions only last a few months. Some only apply to new customers. Others only apply to new deposits. And some (I’m looking at you, Scotiabank) have even more complicated rules requiring a minimum balance, or requiring you to keep your money in the account for a certain period of time, or both. And once the promotional period ends, the interest rate may drop significantly.
I have seen countless discussions where people compare promotional offers and discuss strategies for moving money between institutions. One thing that experienced savers constantly remind each other is that getting the promotional rate is only half the strategy. The other half is knowing exactly when it ends. One mistake people make is opening the account, depositing the money, and then completely forgetting about it. A few months later they discover the promotion ended weeks ago and they are now earning a much lower rate.
That is why I always think promotional rates should come with a plan. If someone is opening an account for a promotional offer, they should also know what they plan to do when that promotion expires.
4. Not building an emergency fund first
If someone had asked me a few years ago about emergency funds, I probably would have thought they were something people worried about later in life. Maybe once they owned a house, maybe once they had kids, maybe once they had a full-time career. What I didn’t realize was that emergencies happen regardless of your age or financial situation – even if you’re a student! Life has a way of being expensive when you least expect it. When people first start saving, there is often a temptation to focus entirely on growth. Investing feels exciting. Watching money increase feels exciting. Searching for the highest return possible feels exciting. Emergency funds don’t feel as exciting. But emergency funds are often what prevent financial stress from turning into financial problems. Without emergency savings, people often end up relying on credit cards or lines of credit to cover unexpected expenses. Then what started as a temporary inconvenience becomes debt that follows them for months.
One thing I have learned is that emergency savings deserve their own space. Keeping emergency money separate from other savings makes it easier to avoid spending it on things that are not actually emergencies. The goal is not to build a perfect emergency fund overnight. The goal is simply to create some breathing room for life’s “fun” money surprises.
5. Thinking saving only counts if it’s a large amount
This is one that I think social media has made worse. It is easy to scroll online and see people talking about maxing out investment accounts, saving thousands of dollars every month, or reaching major financial milestones. For students and young adults, that can feel discouraging. There were definitely times where saving small amounts felt pointless. Saving $20 or $50 didn’t seem impressive. It felt like everyone else was moving faster.
But over time I realized something important which was that most successful savers didn’t start by saving huge amounts of money. They started by building habits. A person who saves $50 every month for years is often in a better position than someone who saves a large amount once and then gives up.
The hardest part of saving is usually not the math. It is consistency. Some months are better than others. Sometimes there is extra money available. Sometimes there isn’t. What matters most is building a routine that can survive both situations. Small amounts still count and small amounts still build habits. And those habits are often what lead to bigger financial goals later.
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