Four Most Common Financial Mistakes

May 10, 2012 § Leave a comment

If you could take a few simple steps and avoid a few nasty mishaps from common mistakes, wouldn’t you want to do that? Here are the four most common money mistakes, and my take on how to avoid them, from a recent survey.

 Budget– As in Not HAVING a Budget- According to this report, over HALF of Americans report not having a budget and 20% have no idea how much they spend on housing food and entertainment. No one has so much cash that you can just make spending a hobby – without keeping track- and think that life will be cozy, cause it just doesn’t work that way. You don’t get in your car and make a trip without thinking about your destination or gas. Budgets are cozy. It’s your money’s plan for fun and savings, bill paying and your future. A budget is a good thing. Please have one.

 Saving- Forgetting to save or not knowing HOW to save is mistake number 2. According to the report 40% of respondents are saving less this year than last and another 40% have NO money saved for retirement. Many surveyed reported that they didn’t know HOW to save. If you don’t know how to do something, please ASK. Folks, like me, want to HELP you. And we don’t read minds, so we have no idea how we might help if you don’t say. And besides, you’re a grownup and grownups make proper plans. And when they don’t know how to do something, grownups ask for help.

 Overspending – 25% of those polled said they are spending more than they did last year. And if spending is part of your plan, part of your budget, that is terrific, but if it’s happening from emotion, lack of discipline, honey, that’s not good. Shopping isn’t really a hobby or an Olympic event. And overspending can hurt you and your family in the short and long run.

 Credit- Mishandling your credit cards and not handling your credit score is mistake number 4. It’s advised that we all check our credit reports at least once a year. Though that won’t give you a credit SCORE, your credit report will state loans, liens and payments activity. Free credit reports are available at AnnualCreditReport.com. This is the only site recommended by the Federal Trade Commission for no cost reports.

 Credit Karma (at CreditKarma.com) can give you a credit score when you create a free account with them. Credit scores are used by lending agencies to evaluate your use of credit and repayment history. There are many web sites that will help you evaluate what your score means for your interest rate.

 So, four common, avoidable, mistakes, my friend. All of them that with a bit a simple effort or some advice can be addressed. There are MANY kinds of budgets and I’m confident there is a type that will work for you and your life.  You can  start saving by making savings automatic, for your Christmas Club, your vacation, for your retirement. It’s NOT okay to know you are confused and not do something to change your condition. Ask for help! Borrow a book from the library. Get online and do some research. Ask a friendly advisor, like moi. We like this stuff and want to help you!

 

 

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