Money. Sweet, green, dirty dollar bills. It can be a tough thing to manage. Some people struggle because they don’t have enough of it, while others have more than they know what to do with. Both can lead to disastrous outcomes when those spending it don’t know what to do or how to properly manage it. Here are some common financial mistakes that people make–here’s hoping you learn from them.
Waiting To Pay Off Debt
Let’s get this out of the way: do not wait to pay off loans unless you absolutely have to. Whether it be student loan debt, a loan from the bank, a car loan, or a house loan, putting off loans with high interest rates is always a bad idea. Understandably, sometimes people are in a rough spot and can’t afford to pay the recommended monthly payment amount in order to get the loan off their back in a timely manner, but even if you can only chip away at it little pieces at a time, this is far better than racking up further payment in the future via interest rates–watch out for those loan sharks.
Not Investing In Retirement
Too many people today make the mistake of not saving enough, or at all, for their retirement. Younger people tend to make this mistake most frequently, perhaps believing that they will never get old. However, time stops for none of us, so taking the time to set up a 401(k) or investing into a Roth IRA early on is one of the best financial decisions you can make. Living paycheck to paycheck is not ideal, and neither is turning sixty-seven and realizing your wallet is full of lint.
Unnecessary Spending
This should go without saying, but it’s going to be said anyway: if you spend more than you earn, you’re going to end up broke. This is arguably the most common way people end up in financial trouble. One, two, ten extra swipes of the credit card a day adds up. Budgeting your monthly income and expenses is a reliable way to figure out how much money is left at the end of the month. That means gas, bills, insurance, food, rent, your Netflix subscription, all of it. Don’t forget food for the dog, emergency money, and your brother’s birthday present. Put some of it into savings! Once all that is taken care of, there is nothing wrong with taking some of your leftover change and buying yourself a new pair of shoes or hitting the movie theaters. Just be sure that when you need to buy a new car, you choose something within your budget, and maybe not that brand new Rolls-Royce–we know it looks cool, but trust us, just don’t.
Takeaway
Taking the correct steps to manage your finances is an effective way to ensure you never end up in any money predicaments. People who work in retail stores, marketing agencies, scribing companies, and, yes, even personal financing–who would’ve thought?–all have to deal with their finances. No matter what your career is, it’s an essential part of maintaining order. If you need to hire a financial planner, that’s okay, too, just be sure that your finances are in order.