Managing your finances is easier than you think. With a plan in place and some determination, you can achieve your financial goals. However, there are some everyday life distractions that can derail you. Here are seven common financial mistakes and how to avoid them:
1. Not Having a Budget
If you don’t have a budget in place, then you’re sure to overspend without realizing it. Track your expenses for a month to see where you could cut back or improve your spending habits. Once you set up a budget and savings goals, it will be easier to avoid impulse buys. Check out some of these great financial apps to keep you on track while you’re on the go. For helpful advice on how to set up a budget, read Amanda’s post for some helpful tips.
2. Cutting Back on the Small Stuff
Doing away with the coffee shop might be a good idea. Also consider the big things you have and don’t need. Cutting one big ticket item can make a large difference in achieving your financial goals.
3. Buying Too Much House, or Too Much Car
Having a Mercedes or living in a brand new house might seem picture perfect. Make sure you can afford maintenance on your car or home in addition to your monthly payment or mortgage before making the investment. Learn about the different types of mortgages and home equity options from Jay’s post here.
4. Spending Money You Don’t Have
It’s easy to spend your big bonus before you get it, but if you do, you’ll be living in the red. Instead of buying that shiny new toy, invest in your future. Are you putting enough away for your kid’s college fund or your retirement fund? See Chris’s post about the College vs. Retirement Savings Battle.
5. Not Saving Money
Set up an emergency fund in case the unexpected happens. If you lose your job, or have an emergency, you’ll be glad you did. Check out Jesse’s tips for how to embrace savings.
6. Relying on Credit
Living on credit means you are living in the negative. It can be difficult to catch up. Only use credit cards when you have the money to pay them back. Here are five important things to consider about using credit cards.
7. Listening to Your Friends
Every financial situation is different. What worked for your friends may not work for you. Instead, obtain advice from respected financial consultants. Do you have any other mistakes or solutions you can add?