5 Money Mistakes & 5 Easy Fixes
It’s scary but true – just a few financial mishaps here and there can add up to a lot of lost cash. Check out these five common money mistakes and follow the advice to help spot money leaks and boost your bottom line.
Money Mistake #1: Being financially vague
Not knowing how much is in your savings and checking accounts, how much you owe on credit cards, and where your money is going leaves you without a master plan for getting the things you want in life. The fix? Simply set up a system (like Microsoft Money or Mint.com) for tracking all your accounts and maintain it weekly. Think of how much you could save on late fees, insufficient funds fees and all the other expenses of not having your finances in order!
Money Mistake #2: Waiting to save
It sounds surprising, but someone who opens a retirement account in their 20s can end up with twice as much money as someone who starts one in their 30s. The fix? Start saving NOW. It’s simple – just follow the Law of Ten Cents, which states to take ten cents of every dollar you earn and SAVE IT. Living on 90% of your income is easier than you think, and you’ll soon be on your way to building a very nice nest egg. You could also join your company’s 401(k) plan or open your own IRA (Individual Retirement Account) through Mountain Community.
Money Mistake #3: Paying off debts in the wrong order
Bigger balances on things like student loans and mortgages can seem overwhelming, but it’s the smaller credit card bills that can really hurt you. The fix? Pay off the card whose balance is closest to its limit (having balances close to your limit lowers your credit score), then start chipping away on the card with the highest interest rate. Also, refinance big-ticket balances (mortgage, etc.) to make payments a little more manageable.
Money Mistake #4: Failing to negotiate
When entering the workforce or switching jobs, many people fail to negotiate a high enough starting salary – which can add up to thousands of lost dollars over a lifetime. The fix? Know what you’re worth by checking a Web site like salary.com. And don’t be shy when asking for more money. Employers expect to negotiate salary when hiring new employees. And don’t stop negotiating there; you can negotiate almost anything! From cars, furniture, rent, credit card rates, hotel room and airfare rates, and even prices at garage sales – the list is endless!
Money Mistake #5: Buying NOW
If you MUST have things BEFORE you have money to cover them, you’ve fallen prey to the great American debt trap. Just look at interest charges – debt isn’t cheap. The fix? Good things come to those who wait. We’ve all heard it before, and it’s true! If you can wait until later and put money away for whatever purchase you have in mind, you won’t have to use credit cards with high interest rates – and you’ll have no debt!