To Err Is Human

People make a lot of mistakes when it comes to their finances. Mistakes that can cost you thousands, if not hundreds of thousands in the long run. Let’s take a look at some of the biggest mistakes that people make and learn how to correct them. Ready to get started?

Nobody is perfect but that does not mean that you should not strive for perfection. Here are some of the top mistakes that people make when it comes to finances. See how many that you make and then fix them.

  1. Not Monitoring Your Credit
    Your credit report has a huge impact on getting a job, how much you pay for financing and even how much you pay for car insurance. If you do not always know what your score is and what you need to work on, you are making a big mistake.
    Signing up for a free credit monitoring service like Credit Karma is a no brainer. It is, after all, free, so do it.
  2. Failing To Save Money
    Saving is crucial. If you are spending everything that you make, you will never get ahead and will have to work for the rest of your life.
    The problem is that people set their budget without considering saving as an expense. When setting your budget, take your net pay and subtract 20 percent for savings. Then take the rest of your money to live on.
    20% might seem like a lot of money but it is completely doable, you just need to adjust your lifestyle.
  3. Not Handling Debt
    Most people just accumulate debt with no consideration as to how to get it paid off. They just keep growing their debt and figure things will take care of themselves, perhaps when they get that bonus that never comes.
    If you have debt, have a plan. Pick one account at a time and concentrate on paying it down and stop adding to your debt. If you find that you need money from your credit cards monthly, you need to adjust your budget.
  4. Being Under Insured
    If you have a car, you probably have car insurance and if you have a mortgage, home owners insurance is mandatory but you still might be under insured.
    What would happen in an emergency? If you were to suddenly die, would your family be okay? If you became disabled could you pay your bills? If there was a fire in your apartment would you lose everything?
    Make an appointment with your insurance agent and make sure that you are prepared for life’s emergencies.
  5. Neglecting To Improve Yourself
    If you stop improving yourself and stop adding to your skillset, you become stagnant.
    Just because you are in a career does not mean that you should stop improving yourself. Continue your education, get some certifications or even learn a new language. Whatever you can do to improve your value to your employer.
    Use these new skills to get promotions or raises at your current position or add them to your resume to get a better paying job.
  6. Paying Full Price
    If you just see it, want it and buy it, you are making a mistake. You can waste hundreds of dollars a month by not price shopping.
    Make sure that you take the time to look for the best price. That might mean negotiating, it might mean joining a loyalty program or it could be as easy as using the Honey browser extension.
  7. Renting Instead Of Buying
    Yes, owning a home is a responsibility but in the vast majority of cases, it is a good financial move. A home is like a forced savings account and in general, it is an appreciating asset.
    In addition, eventually, it will lead to cheaper living expenses. While it might be more expensive at first to own, your home mortgage only goes up slightly each year with property taxes. Rent, on the other hand, can escalate quickly.
  8. Never Auditing Your Budget
    When was the last time that you really looked at your budget? You should audit your expenses at least once a year and see where you can save. Sure, it is easier to jut keep plogging along but it will cost you.
    Once a year, shop for cheaper car insurance, lower internet prices and even look to see if you can save by refinancing your cash loans.
  9. Competing With Others
    Do you see people with things and suddenly want them yourself? Trying to keep up with others will positively wreck your budget and your financial security. You have no idea how much money those people make or even how much debt they are in.
    Live within the means. If, after saving, you have money to spoil yourself do so but don’t take out a loan to keep up with others.
  10. Paying Fees
    Fees are everywhere and most people just accept them for the sake of convenience. It might be a fee to use a non bank ATM, a fee to pay a bill over the phone or a transaction fee on a stock purchase.
    stop paying these fees by taking the time to avoid them, looking for companies that do not charge the fees or simply calling companies to dispute them. A little leg work can save you hundreds of dollars in fees each year.

Wrapping Up

Everybody makes mistake, so don’t kick yourself if you find that you are making a few of the mistakes above. Do, however, correct your mistakes and start creating a better financial future for yourself.

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James Car is a finance, loan and budget expert based in the United States. After attending Brookhaven college, he went on to become a successful entrepreneur. He now enjoys writing articles that help people save and make the most of their money.