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Seven common money mistakes

By on August 7, 2009

burning money
photo by purpleslog

You’ve probably made a financial mistake or two. Some money mistakes are fairly common. Most people learn from them and make changes for the better. Consistent decisions (both large and small) can have a big impact on your financial future. If you’re starting out, you’ll be ahead of the game if you make the best choices and avoid common money mistakes. But it’s never too late to get to back on track and make corrections.
Here’s how to avoid a few common pitfalls.

IMPULSE BUYING: OK, sometimes there’s a purchase you simply don’t want to pass up. But often, making impulsive purchases works against you. Be an educated consumer so you don’t waste your hard-earned money. When possible, delay buying. Wait at least 24 hours for larger-ticket items and a few hours for anything that costs less than $100. This will give you time to research items, weigh out your options, comparison shop, or decide whether you can live without it. Sometimes your interest fades quickly.

LENDING MONEY: Don’t do it. Make it a personal policy.

TIME IS MONEY: We’re all trying to save time. There are many products and services available to help you do this. But many of these items are shaving only a few minutes of your time and costing too much money. That’s money that could go toward something else, such as debt or savings. Bagged salads, pre-chopped fruits and vegetables, shredded cheese and premade sandwiches come to mind. Evaluate your timesaving decisions.

BLISSFUL IGNORANCE: Create a budget. Track where your money is going. Monitor rebates, identify money leaks, and re-evaluate services such as gym memberships and media subscriptions such as cable-television packages. Do you use these services? If you’re married, don’t rely on your spouse’s credit. Build or repair your own. Don’t keep money secrets. And don’t overlook checking your credit report annually. You need to know whether it’s accurate.

DON’T OVEREXTEND YOURSELF: Take into consideration features you can live without when it comes to buying a home or vehicle. Do you really need two fireplaces and a pool or heated seats and mirrors? Don’t buy the maximum home you’re approved for. Situations often change, so don’t assume hardship can’t happen to you. Strive for your monthly debt obligations to be less than 36 percent of your gross monthly income. Learn to say no to your kids, too. Financial discipline is for all family members. Your finances come first. For example, your retirement trumps their college.

THE BARE MINIMUM: Show some effort. This applies to all areas of your life, such as your marriage (divorce is expensive), but especially when it comes to making minimum payments on credit cards and loans. If you carry a balance on your credit card in the thousands and continue to make minimum payments, you might not live to pay it off. Visit www.financialcalculators.com, and see how much you can save by making extra payments. Be sure to check your insurance policies, too. You don’t want to be underinsured. Evaluate your deductibles, too. Your kitchen pantry should not be at the bare minimum, either. If you experience a job loss, you’ll be happy you were prepared; and if you don’t, you’ll be pleased with the money you saved by stocking up during sales. Take care of yourself, too. You and your health shouldn’t be last on the list.

NO ‘I’ IN TEAM: In a relationship, one person shouldn’t handle all of the money. Budgeting is for both partners. Set financial goals together. Know what is going on with your money. Build your savings together. If you haven’t already, make it a priority to establish an emergency fund.

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4 Comments

  1. J.N.Urbanski

    8/7/2009 at 10:52 am

    It’s true: time is money and this is so important! Most people overlook this fact. If you have down- or enforced furlough time this August take the opportunity to turn you passion or hobby into a side business. Many people think that they’re not capable, or don’t have the confidence, but there’s always something you can do. Parents have argued to me that they don’t have the time, but my mother had three kids and she had time to make jam, bread, yoghurt etc for bake sales; she also knitted and made our clothes and had a part-time job. Get rid of the television and you’ll have some seed money in no time.

  2. Sara Noel

    8/7/2009 at 10:56 am

  3. J.N.Urbanski

    8/7/2009 at 11:30 am

    Excellent! I started up a jewelry business, but it takes a while to build your market. Plus, it cost more than I thought for raw product like pearls, gemstones. I have sold and gifted to most of my family though. Word of mouth is the best advertising for local sales and you can give discounts for weddings and mothers’ days, etc.

  4. Charles C

    8/7/2009 at 8:34 pm

    Don’t have any site, facebook or twitter, just yahoo mail, and a little bit at gmail.

    I fix everything, don’t hire any service for anything, now I maynot know how to fix it before starting, but it gets fixed.

    There is only one accountant in this twosome, and figured out a long time ago, the wife while not better at math, at least made fewer mistakes.

    Am on a fixed income, but that is subject to change, never have like to work for an employer and won’t. Usually I get supplemental income from raising veggie plants and gardening veggies.

    Now there comes times when this doesn’t surfice, and learned early, although I’m lazy when it comes to doing those things I don’t enjoy. I do have a certain talent for making money when push comes to shove.

    The following example still holds today.

    “One Christmas I was caught short and had 5 kids at the time, and never had the Tree been bare in years past as it was then. So went to my local bank and set with the wife for a while, and the bank officer kept glancing my way, and finally got up, and came over and said, Charlie I’m not going to be able to do any business with you today.” Best thing he ever did.

    I got into the Yellow Pages, and being a roofer, winter isn’t too good a time for making money. But I spent most of the day before getting someone, that had a leaking roof.

    Well my company name and who ever done his must have sounded similar. After a bit of cursing and me wanting to hang up, (everytime I thought about hanging up kept thinking how hard it was to find this one potential customer, and that empty tree, so I kept talking for maybe an hour and a half) Finally got this guy to agree to let me come up(job was 45 miles away)and at least talk to him. Well I did the next day, and to make the story short, I ended up making $9,000.00, profit on this one roof in a week, handed the wife $6000.00 to shop with.

    Story is if you are suffciently motivated, you don’t necessarily have to have a big wad of money. Guess what I’m saying is that I’ve always had the ability to do this. If I’d have been so persistent and hardworking all the time. I’d have a wad today. Well, I’m comfortable and that’s good enough for me.

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