We all tend to make mistakes with our money but some end up costing us more in the long run. Just look at those who travelled to the Bahamas in search of an elite concert experience in the Fyre Festival. While you probably know well enough not to spend $25,000 on a concert ticket, there are other, smaller mistakes you’re making quite often. Ensure you aren’t making the most heinous of them all by checking in with this guide.
- Ignore the Household Budget
The household budget is one of the most important financial tools you can use. It’s the only way you can truly understand where you money is going every month. When tallied correctly, it will bring to light less than favorable spending habits that may put your goals of saving money or preparing for retirement in jeopardy. Sadly, a large portion of the country doesn’t use their household budget, as roughly 60% of Americans spend their money without thought. Don’t be one of these individuals. Take the time to create a budget and figure out how much you can spend on items, bills, and repairs if you expect to meet your goals. If you aren’t sure about where to start, consider using an online guide or app to help you.
- Say ‘Yes’ to Every Impulse Buy
Even with a budget, it’s hard to deny ourselves that Unicorn Frappuccino, the latest Mass Effect game, or brand new Pumas. Though your trip to Starbucks or online purchase of video games doesn’t seem like a big deal on its own, when you make these purchases regularly they can compound and do serious damage on your savings. Use your budget to identify which unnecessary items or services you end up buying most often. You don’t have to eliminate them entirely, but you can plan to limit these purchases to once a month (or another appropriate timeline).
- Don’t Prepare for Unexpected Expenses
First-time budgeters have an unfortunate habit of ignoring the unexpected in their plans. All too often, they focus on goals of travelling, splurging on a new phone, or investing in retirement. While these are great ways of motivating you to avoid impulse purchases, they aren’t the only things you need to consider. Bad things happen; your car will break down, and you’ll have to visit the doctor’s. You need to start saving for an emergency fund that can cover last-minute repairs, renovations, and purchases that you can’t avoid. By reserving some of your earnings with this purpose in mind, you won’t be caught unawares and ill-equipped to pay for your new-found responsibilities.
- Speed Read over a CAB’s Terms and Conditions
Until you’ve set aside enough money for these emergencies, you’ll need outside assistance to help cover these expenses. This in itself isn’t a mistake, but not taking the time to read the associated terms and conditions is. You can agree to a loan that’s outside of your abilities to repay on time when you do, so read up on the details of your loan before you sign a contract. A CAB like MoneyKey makes sure you can find all of the pertinent information on their website, so you only have to check out their website to see the associated fees and terms. You can also find out more about installment loans from MoneyKey by calling or emailing their representatives. They can speak to over the phone in order to clarify anything that’s on their website, so you’re never left in the dark about your installment loan.
- Overlook Tax Opportunities
Though you filed and paid your taxes months ago, it’s never too early about next year’s tax season. Though it may be your least favorite time of the year, there’s an opportunity to make money. The IRS offers a variety of tax credits and deductions depending on your income that can reduce the amount of tax you have to pay. When you ignore these opportunities, you can be missing out.
Are you guilty of making one (or more) of these mistakes? If so, it’s time to change up your habits so you can eliminate these errors from your wallet.