Avoid These Classic Money Mistakes
Most people struggle with money at some point and many struggle with it for years. Too many live paycheck to paycheck and they are often only a month away from disaster, even becoming homeless. It is true that the income levels for many people are not very good in these economic times, but they can do things to help their situation. It starts with not making mistakes with money. Listed here are five of the most common errors you should start eliminating.
Think Twice About Payday Loans
These are a last resort for anyone who is in desperate need of money. The interest rates are usually high and this kind of financing can put the borrower in a seemingly endless loop of paying back and borrowing again. Before ever considering one of these, compare loans with several companies to find the best terms that will not serve to make your situation worse.
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Pay Off Credit Cards Each Month
Credit cards are a convenience, but if you carry a balance, they cost you extra money each month. Interest adds up quickly and you might not even realize how much of your money is going to these payments rather than other things that are more important to your financial situation.
If you already have a large balance, don’t make minimum payments; pay a larger amount each month to eventually pay off the card.
Stop Taking ATM Withdrawals From Other Banks
If you take withdrawals from any ATM other than that of your own bank, you will pay a fee to the owner of the ATM and probably to your own bank. These fees can be quite hefty and just one withdrawal can cost you six dollars or more.
To solve this problem, use a machine at one of your banks, or buy a pack of gum at a convenience store that will give you cash back with your purchase. It is cheaper than an ATM fee and it will help you to keep your breath fresh.
Set Aside Future Living Expenses
If it takes nearly everything you earn to survive until the next payday, it may be easier said than done, but you have to create a budget that will let you set aside some money each month so you have additional funds in case you lose your job or have an emergency. Experts recommend at least three months of living expenses and many suggest as many as six or more.
Stop Buying Things On Impulse
Unless you are writing down every purchase you make, you probably have no idea how much money you spend on impulse purchases. If you knew, it would probably shock you. Even if your impulse purchases only amount to $5 per day, that is $150 per month.
That money could go to paying off credit card debt or building an emergency fund. That gourmet coffee you just cannot resist may be keeping you from getting ahead financially and both of those things can keep you awake at night.
–Brought to you by Money Supermarket.
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Thank you – these are some great tips! I have stopped carrying cash because I find it is easier to “impulse buy” when I have cash for the smaller things like an extra coffee or a candy bar at the gas staion, etc. But if I only have my debit card, I don’t want to swipe it for just a couple of dollars for something unneeded. Plus every time I balance my card, I have to hold myself accountable for everything I buy!
Lisa C says
Great tip about ATM withdrawls! Those $2-$3 fees can add up to be a lot!