With the economy still on shaky ground, it’s more important than ever to make sound financial decisions. The following are five big financial mistakes that you don’t want to make with your money.
Not Making and Sticking to a Budget
Even if you’re making an above average income, if you’re not budgeting your money you could be setting yourself up for financial problems. Starting a budget can be as simple as writing all income on one side of a paper and listing all monthly expenses on the other side. From there, you can decide if there is anything in the budget that can be eliminated or reduced.
Not Paying the Balance On Credit Cards Each Month
If you’ve been using your credit card to buy clothes, eat out at restaurants, or for any other purchases that exceed your budget and aren’t absolutely necessary, it’s probably time to scale back. This is especially true if you’re not paying off the balance each month. Interest rates can add up fast and amount to hundreds of dollars each year depending on the balance.
Not Having an Emergency Fund
It’s almost inevitable that a financial emergency will happen at some point in your life. Appliances break down, cars need unexpected repairs, and health insurance doesn’t always cover the procedures we need to have. Sometimes more serious issues occur such as a job loss or a long-term health crisis. It’s important to have as much as possible set aside for the unexpected. At the very least it’s recommended to have enough to pay for 6 months of living expenses.
Not Saving for Retirement
Even if Social Security and Medicare is available in its current form by the time you retire, it’s simply not enough for most people to live comfortably on. Putting just $25 each week away for retirement adds up to $1300 annually. Invest at least this much in an IRA or an employee matched 401k to have a nice supplement to Social Security and an easy transition into retirement with no added stress!
Overpaying for Utilities
Bills each month like CableTV, utilities, and insurance recur every month add up over the years. Are you paying too much or have your bills mysteriously increased (even by a little)? Billshark is the answer! We specialize in negotiating your bills whether you just want to save a little money or the hassle of spending your time on the phone. Don’t overpay!
All five of these items can be considered big financial mistakes in the long run. Do yourself a financial favor and take some of the stress away by following our simple and effective tips.