Like most people, you probably wish for more money. What if I told you that more money was right in front of you? Not only could these money mistakes could be costing you big, they could be the reason you aren’t meeting your financial goals.
Money Mistake #1: Forgetting irregular expenses in your budget
Does it seems like every month some expense comes up and messes with your budget?
But be honest with yourself. How many of these expenses are really unexpected?
Birthdays and holidays come at the same time every year.
Your cat or dog needs checkups and vaccinations every year.
The trash bill comes once a quarter.
These expenses aren’t unexpected, but maybe you didn’t plan for them. If you don’t plan for these expenses, they can quickly throw your budget out of whack.
Money Mistake #2: Not budgeting for savings
Do you save only what is left at the end of the month? If you let all your expenses come first, how much is really left for savings?
When we don’t make savings a financial priority, everything else ends up taking priority. And then you find there’s only a little bit left for savings. Or nothing at all.
Why do you think the government takes taxes out of your pay before you even see it? So they are guaranteed to get their money! We’d all probably have a hard time coming up with several thousand dollars come tax time if they didn’t handle our pay this way.
Money Mistake #3: Not having a plan to get out of debt
It’s great to be ready to get out of debt, but do you have a plan on how that will actually happen?
Are you just paying the minimums on your credit cards? Or just the regular payments on your car or student loans?
A credit card with a modest $3,000 balance would take nearly 10 years to pay off if you only make the minimum payments (assumes 15% interest, monthly minimum payments of 3%). And I’d be willing to bet that you have more debts than just a single credit card.
Money Mistake #4: The wrong mindset
Do you feel like why should you bother with your finances because there’s no hope for anything better? Or maybe you are filled with regret about your current financial situation.
I believe that your mindset surrounding your money is the most important aspect of making changes in your financial situation.
Money Mistake #5: Not tracking your spending
Do you know what you are spending on utilities, food, and entertainment every month?How about gas, dining out, or clothes?
When we spend money without tracking it, we don’t pay as much attention as we should. Once you start tracking your spending, I bet you will be surprised by how much you really spend on things like groceries or entertainment.
A clear picture of where your money is going is key to meeting your financial goals!
Money Mistake #6: Throwing money away every month
Do you review your bank statements, bills, and credit cards every month? Are there any fees or charges for things you aren’t using or could get for free?
Are there things you pay for every month but aren’t using, such as a newspaper subscription or gym membership?
There’s plenty of ways you might be throwing money away every month. While $5 here or there might not seem like much, if you have several small money drains, it adds up!
Money Mistake #7: Not working with your spouse or partner
Are you in a relationship where one partner is a spender and the other is a saver? Or maybe you have widely different financial goals?
When two people are not on the same page, one partner can completely derail any plans or progress made by the other person!
A united front is imperative to see the best results from any financial plan. When one partner is not committed to the goals, it will be much harder to make them happen.
Money Mistake #8: Getting a large tax refund every year
Sure, it’s nice to get a big windfall every year. But do you realize what a large tax refund really means?
It means you let Uncle Sam hold your money all year for free!
You didn’t earn interest and weren’t able to invest that money.
If you are getting large tax refunds every year, consider changing your tax withholdings so you can bring home more every month. (Please check with your accountant or tax advisor first!) Use this extra money in your paycheck to work on meeting your financial goals.