Most are guilty of common traps in personal finance, and some of us fall victim to situations where things can spiral out of control.
Blunders like these can impact our finances and ruin our budgets. These are some ideas on how to go about identifying and fixing such issues.
Things like procrastination, impulse buys or not having a budget all contribute to common money mistakes, but let’s look at some not so obvious ones.
At some point you’ll be tempted by the idea of buying a new car. This is about the worst investment you can make with your money as it begins to depreciate the moment you signed.
Owing on Cards
If you’re carrying a balance on any credit cards, you should make it a priority to pay this off immediately. As the high interest debt grows, if you’re only making the minimum payments, you could be sliding into deeper financial issues. Take care of your balance straight away.
Overindulging on Autopilot
If you have a bunch of subscriptions on autopilot, many can be forgotten. If you aren’t closely monitoring your monthly statements they might be missed. Or you might be aware of them but haven’t used in some time. These small charges really do add up. If you aren’t using it, cancel it.
Collecting points or rewards on a credit card is easy to rationalize spending habits when there is a goal, but it can also lead to overspending. That can lead to carrying a balance, and if you’re chasing rewards you should never carry a balance on your cards.
That must have shoes, bag or something else should be part of the plan, not an impromptu reward rationalized away. Even if it’s on sale, does it fit within your budget?
The Fees Drain
Are bank fees draining your accounts? Switching to a bank or credit union that offers free checking or no fees is a good start. Also, keeping enough of a balance to to avoid overdrafts and staying on top of your balance helps.
Living beyond Your Means
This is all too common for many, and being able to spot it early before it does real damage to your balance or credit rating is important. Get your financial life under control with budgeting and tracking tools to avoid getting into a hole too deep to get out of.