Top 5 Money Mistakes.
Over the years I've heard and seen some big mistakes when it comes to money, some are easy to avoid some not so much. Here I'll give you my top 5 money mistakes that I've seen people are prone to making.
5. Not having a budget.
I just cant comprehend why people don't do this. Take 10 minutes a day or an hour a week and sit your ass down at a table with your bills and find out how much your spending.
Figure out how much money you are getting every month then figure out how much you spent.
-Spent more than you made? then you have a problem.
-Spent as much as you made? you still have a problem.
-Spent less than you made? good, keep it up.
there are bills you KNOW your going to have every month, and most of them will be the same from month to month. my phone bill, mortgage, car insurance, etc. they don't change. so I KNOW I have to pay "X" each month.
Now food and gas and my electric and a few others change, but I can ball park them (Avg of "Y").
If the monthly bills are almost exactly what you make or more then your living above your means and you need to cut something (or make more). In a perfect world you should have 10% of your income (or more) left over every month. (that's AFTER saving money)
and as a sub section to this. another mistake people make is not leaving room for the unexpected or mistakes in your budget. Shit happens and your going to have to deal with it.
4. Not paying bills. (on time or at all)
Not paying what you owe is bad. not a little bad, very bad. especially interest bearing loans. and worst to worst they will put your ass in jail or if your lucky just take what you own to make up for it.
I watched a guy get one of those auto loans, he got 500$. he missed a payment or three and ended up having to pay nearly 3,000 back to keep his truck. I realize that sometimes you just NEED the money, but if you keep up with your finances and your credit you can go to the bank and get a personal loan and they wont threaten to cut off your legs if you cant pay it back. and your not going to have to pay 500% of the loan back either. (hopefully)
But don't ever think "eh, I'll just take the hit on my credit score and not pay it back" that only works once or twice, and then you can't get a loan again. Oh, and you STILL OWE the money, they just take it out of your bank account or tax refund.
Same goes for not paying bills on time. Unless you like paying late payments and overdue fees.
3. Not saving money.
Or as i like to say being "near sighted" If you can only see 5 minutes in front of your face and refuse to save money because you want that instant gratification that comes from getting the latest and greatest toy out there then your going to crash and buuuurn.
Most people live paycheck to paycheck, sadly a lot of them don't HAVE to, they just don't know how NOT to spend money. its like people think "if i don't spend this 20$ now i might not be able to later!!" or "what can this money do for me Now?!?" no, this is bad bad bad. Don't think this way.
And whats worse is spending money you DON'T have. If you cant afford that new TV and you go and get a credit card to finance it... your going to be in deep financial trouble.
2. Not educating yourself on Car or Home purchases
Actually this applies to any large purchase (over say 10,000$). Not reading the fine print, not shopping around, not doing your homework on possible devaluation, areas of town, gas mileage, etc etc.
A lot of people buy more than they need, or buy something that devalues fast (any new car), or they find out they over paid by 10%, etc. If your going to spend a decent wad of cash don't just buy the first thing you like. Take your time. enlist the help of others.
(I always shop around if I'm going to be spending more than 200$, but that's me)
1. Not paying attention to your money.
One person I know (not naming names) said about the dumbest thing I've ever heard "I don't rely know how much money is in my account, but I'm sure its OK" I asked when the last time he checked, apparently it was MONTHS ago. (this guy had a minimum wage job, knew he was spending more than he made and was living on extra money he had left over from student loans)
I can understand some anxiety about checking your account, especially if your scared its not going to be up where it needs to be. I've been there. just dreading looking at it. however... NOT knowing how much you have is way WAY worse than knowing, ANY day of the week.
I check my bank account about once every 2 or 3 days... AT LEAST. some weeks I check it daily. Mainly because I pay for most things with my debit card and I like to make sure I know EXACTLY how much money is in my account. This way I never overdraw (fuuuuck those fees) and I can keep an eye on how much I'm spending on things like gas and food (see finances)
In fact I've known a few people that will put off looking at their bank account for a few days just because they are scared of the number they will see. Like if they hide their head in the sand it will magically take care of itself. No, this is bad. I remember one time I checked my account, realized that I had just 2.40$ in my checking and I knew I had to get lunch and gas. So I transferred some cash from savings and boom, good to go.
had I not I would have used my card at LEAST twice. and that's 20$ every time I go over... even if I have the money in my savings account... Lesson here is keep an eye on your money.
There are plenty other mistakes people make, but these are the ones I see more often.
I've got a few more posts rattling around in my head but I'll open this up to you guys as well, let me know if there is anything you would like to see a post on, or expand on an earlier post.
5. Not having a budget.
I just cant comprehend why people don't do this. Take 10 minutes a day or an hour a week and sit your ass down at a table with your bills and find out how much your spending.
Figure out how much money you are getting every month then figure out how much you spent.
-Spent more than you made? then you have a problem.
-Spent as much as you made? you still have a problem.
-Spent less than you made? good, keep it up.
there are bills you KNOW your going to have every month, and most of them will be the same from month to month. my phone bill, mortgage, car insurance, etc. they don't change. so I KNOW I have to pay "X" each month.
Now food and gas and my electric and a few others change, but I can ball park them (Avg of "Y").
If the monthly bills are almost exactly what you make or more then your living above your means and you need to cut something (or make more). In a perfect world you should have 10% of your income (or more) left over every month. (that's AFTER saving money)
and as a sub section to this. another mistake people make is not leaving room for the unexpected or mistakes in your budget. Shit happens and your going to have to deal with it.
4. Not paying bills. (on time or at all)
Not paying what you owe is bad. not a little bad, very bad. especially interest bearing loans. and worst to worst they will put your ass in jail or if your lucky just take what you own to make up for it.
I watched a guy get one of those auto loans, he got 500$. he missed a payment or three and ended up having to pay nearly 3,000 back to keep his truck. I realize that sometimes you just NEED the money, but if you keep up with your finances and your credit you can go to the bank and get a personal loan and they wont threaten to cut off your legs if you cant pay it back. and your not going to have to pay 500% of the loan back either. (hopefully)
But don't ever think "eh, I'll just take the hit on my credit score and not pay it back" that only works once or twice, and then you can't get a loan again. Oh, and you STILL OWE the money, they just take it out of your bank account or tax refund.
Same goes for not paying bills on time. Unless you like paying late payments and overdue fees.
3. Not saving money.
Or as i like to say being "near sighted" If you can only see 5 minutes in front of your face and refuse to save money because you want that instant gratification that comes from getting the latest and greatest toy out there then your going to crash and buuuurn.
Most people live paycheck to paycheck, sadly a lot of them don't HAVE to, they just don't know how NOT to spend money. its like people think "if i don't spend this 20$ now i might not be able to later!!" or "what can this money do for me Now?!?" no, this is bad bad bad. Don't think this way.
And whats worse is spending money you DON'T have. If you cant afford that new TV and you go and get a credit card to finance it... your going to be in deep financial trouble.
2. Not educating yourself on Car or Home purchases
Actually this applies to any large purchase (over say 10,000$). Not reading the fine print, not shopping around, not doing your homework on possible devaluation, areas of town, gas mileage, etc etc.
A lot of people buy more than they need, or buy something that devalues fast (any new car), or they find out they over paid by 10%, etc. If your going to spend a decent wad of cash don't just buy the first thing you like. Take your time. enlist the help of others.
(I always shop around if I'm going to be spending more than 200$, but that's me)
1. Not paying attention to your money.
One person I know (not naming names) said about the dumbest thing I've ever heard "I don't rely know how much money is in my account, but I'm sure its OK" I asked when the last time he checked, apparently it was MONTHS ago. (this guy had a minimum wage job, knew he was spending more than he made and was living on extra money he had left over from student loans)
I can understand some anxiety about checking your account, especially if your scared its not going to be up where it needs to be. I've been there. just dreading looking at it. however... NOT knowing how much you have is way WAY worse than knowing, ANY day of the week.
I check my bank account about once every 2 or 3 days... AT LEAST. some weeks I check it daily. Mainly because I pay for most things with my debit card and I like to make sure I know EXACTLY how much money is in my account. This way I never overdraw (fuuuuck those fees) and I can keep an eye on how much I'm spending on things like gas and food (see finances)
In fact I've known a few people that will put off looking at their bank account for a few days just because they are scared of the number they will see. Like if they hide their head in the sand it will magically take care of itself. No, this is bad. I remember one time I checked my account, realized that I had just 2.40$ in my checking and I knew I had to get lunch and gas. So I transferred some cash from savings and boom, good to go.
had I not I would have used my card at LEAST twice. and that's 20$ every time I go over... even if I have the money in my savings account... Lesson here is keep an eye on your money.
There are plenty other mistakes people make, but these are the ones I see more often.
I've got a few more posts rattling around in my head but I'll open this up to you guys as well, let me know if there is anything you would like to see a post on, or expand on an earlier post.