We all want our money to stay where it belongs: inside of our wallets. Unfortunately, it’s far too easy to derail our goals with unwise decisions. Worse yet, many people believe only so-called experts can manage their finances effectively. That’s not the case.
Even if you’re a novice, you can make wise choices. With that in mind, here are ten foolish money moves you don’t want to make if you want to keep your budget on track.
Keeping a Credit Card Balance When You Have the Money To Pay It
Credit cards are great, and they offer some wonderful perks. However, the interest on your card balance is eating away at the money you could be keeping.
If you have the money in the bank to pay the balance, pay it at the end of the month. With Americans spending billions of dollars on interest and fees, paying off your balance in full is vital.
Buying Items You Rarely Use
Don’t waste your money buying items that you are only going to use a couple of times a year. Examples include sporting goods like kayaks that you only use on vacation or power tools that you only need for one project.
You are better off renting these items and saving your cash.
Forgetting Trial Subscriptions and Returns
Money wasted on subscriptions and returns that you missed the window for returning can add up quickly. Put these items in your phone calendar so that you don’t end up wasting money.
Not Taking Advantage Of Your 401k Match
If your employer offers free 401(k) matching, why wouldn’t you take advantage of it? It’s free money. Many people miss out on this employment perk. If you are one of them, you need to change that.
Empower reports at least 30 percent of Americans don’t take advantage of their 401(k) match. If that’s you, it’s to your benefit to start now.
Not Having Emergency Savings
Life comes at you fast and occasionally comes with unexpected expenses. You need to have some money set to the side in case your car breaks down, you need a tire, or your employment unexpectedly comes to an end.
It’s best to have at least three months of living expenses saved for an emergency. Even if you can’t save that much, don’t give up completely. Make it a goal to save at least $1,000 since that will cover many emergencies.
Using an online bank, such as CIT Bank, is a terrific way to earn as much as you can on those savings.
Buying New When Used Will Do
Do you really need a fresh-off-the-lot new car, or will a used one in good condition suit your needs just as well?
You should really consider buying used in good condition items when you can because it can save you a lot, and many of those shiny new items are going to depreciate fast.
Not Having a Budget
How are you supposed to track your finances and find ways to save more money if you don’t know where your money goes?
You need a good budget and a way to track your expenses so that you can find more ways to save. It’s not difficult to create a budget. Find a free budgeting app you like. Most will take care of much of the heavy lifting for you.
Making Late Payments
Paying a late fee on your bills is a good way to burn through a lot of cash fast. Set up automatic payments for your regular bills. If you can’t do that (not everyone can), set up reminders on your phone so that you can avoid those late fees.
Buying the Minimum Insurance
Sure, having the minimum insurance for your health, home, or car saves you money now. But what about down the road when you actually need to use it?
Are those minimum payments going to be worth the hassle of getting things taken care of properly? It’s at least worth looking at better insurance coverage than just the minimum. Don’t forget to shop around.
Not Having a Side Hustle
No one says you have to work 80 hours a week, but if your main employment is your sole source of income, what happens if you lose it?
There are so many ways to make money on the side these days. It’s kind of financially irresponsible not to find one of your own.
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I’m John Schmoll, a former stockbroker, MBA-grad, published finance writer, and founder of Frugal Rules.
As a veteran of the financial services industry, I’ve worked as a mutual fund administrator, banker, and stockbroker and was Series 7 and 63-licensed, but I left all that behind in 2012 to help people learn how to manage their money.
My goal is to help you gain the knowledge you need to become financially independent with personally-tested financial tools and money-saving solutions.
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