Money Mistakes You Could be Making

While sure, insurance can help you, but it doesn’t help any potential money mistakes that you could be making.  There may not be a cut and dry answer to what is right and wrong, as everyone makes different amounts of money and have different financial goals, but across the board, if you can build up an emergency fund of a few months’ worth of expenses to give yourself a cushion, getting out of debt, while saving for the future you have a good start, but look to avoid a few behaviors that could set you back.

Trying to Keep Up

Sure, we have all heard the old saying about jumping off a bridge would you do it too, but I guess sort of the same thing goes when it comes to finances.  You don’t know everyone’s finances behind closed doors, from what the salary is, to what expenses are, not to mention how much debt they’re in, so just because your friends or family are throwing around money, doesn’t mean that you have to as well.  Keep in line with your budget and make sure your own finances are on track.

Paying Credit Card Interest

Credit cards are great in the fact that you can charge up and not pay until next month, but if you’re not careful that balance can get out of control and you could have trouble paying by the due date.  If that’s the case and your carryover a balance, you will begin to pay interest, which depending on the card could be as much as 16% APR, and depending on how high the balance is, could start to add a significant monthly payment until the balance is gone, provided you pay more than the minimum to get rid of it more quickly.

Missing Out on Company-Matching 401k

Retirement may be decades away but that doesn’t mean you should avoid thinking about it until later on.  The earlier you start to save, the more it has to grow over time and the more you are left with to continue to enjoy life when you finally do walk away from work.  While you should increase contributions every year to maximize savings, don’t miss out on taking advantage of any company-matching contributions that would be leaving free money on the table if you otherwise didn’t use it.  That could be tens to hundreds of thousands of decades from now!

Not Taking Advantage of Credit Card Rewards

I understand the resistance to use credit cards for some that may have a spending problem and don’t want to risk going into debt, but if you can keep spending within your budget, using a credit card for all purchases can actually make sense when it comes to rewards, points or dollars that you can earn just by making the purchases you were going to make anyways.  Not taking advantage of that would be leaving free money on the table, adding up to hundreds to thousands a year depending on how much you spend and the significance of the rewards card.

A Few Ways to Save Money on Purchases

While sure, you can start doing an opinion outpost or few to start making some extra money, but a good place to start is reducing the expenses that you already have.  From getting rid of your cable bill, to avoiding going out to eat, to even just cutting out impulse purchases that you don’t need, you can free up extra money that you can put towards better use, such as paying down debt, building up an emergency fund, or better yet, saving for retirement.  I understand there are certain purchases that we do need to make, and that’s where we can apply the best practices to save as much money as we can.

Keep a List

Sure, it can be helpful even for online shopping to avoid filling the cart with items you don’t need, but before you go out shopping, especially when it comes to going grocery shopping, taking stock of everything you need before you leave the house can be important so that by the time you do get to the store you don’t forget what you went in there for, not to mention coming out with plenty of things you didn’t need in the first place.  A list can help you stay organized to maneuver through the aisles getting exactly what you need.

Find the Best Deal

In order to compare prices, we would have to drive all over town, going from store to store to try and save money, and by the time it was all said and done, between dealing with traffic, wasting gas, to maybe save a few bucks, it makes you wonder if your time isn’t more valuable.  These days you have the luxury of being in your own home, able to flip to virtually endless amounts of websites in a matter of seconds each, trying to find the best price.  Best of all, you don’t have to fight the crowds.

Take Advantage of Credit Card Rewards

Credit cards used to get a bad rap, but if used correctly, they can actually make good financial sense.  Take rewards for instance, by making the purchases that you would be making anyways, you can earn points of which you can redeem for gift cards, hotel, or airline miles, or even a cashback check.  It can be argued that you could actually use a credit card for all purchases, but for some, seeing the rewards add up could mean more purchases, and if you are unable to pay off the full statement balance by the due date, the amount you pay in interest could outweigh the rewards.

Or Try Using Only Cash

Credit cards are not for all, and I understand that, so if you are at risk of going into a spending frenzy then perhaps using cash in credit is the way to go.  This way you can allow yourself a certain amount to spend, and once it’s gone, it’s gone.  This could be a nice way to budget all expenses and the little spending money that you have left over.

Use a Credit Card the Right Way and Avoid Making Mistakes

Believe it or not there actually are right ways to use a credit card that can actually be financially smart but it’s the mistakes that will get you in trouble.  With the amount of fraud these days, it’s risky to even use a debit card, with your bank account potentially being wiped out if anyone was able to grab your information, until you sort everything out.  Making credit card mistakes are common, so try and avoid these so you can continue down the right financial path.

Not Taking Advantage of Rewards

By making the purchases that you would be making anyways you can earn rewards in the form of miles, points you can redeem for gift cards, or even a cashback check, depending on the card.  Not taking advantage of a credit card without rewards is essentially leaving free money on the table otherwise, which depending how much your expenses in a year are that you could use on your credit card, could be worth up to a thousand dollars in rewards, again, just by making the purchases you would be making anyways, like lowes build and grow.  Seeing the rewards add up and make more purchases than you can afford is where you would get in trouble when the interest you pay far exceeds the rewards earned.

Not Using Store Card

If you shop at a certain store, whether it’s for clothes, or electronics, or both, it may actually be worth it to get a store credit card to use for those purchases.  By signing up for the card in the first place you can save off the bill as a promo percent off, but also you can receive coupons in your email for future sales, not to mention by continuing to use your card you can continue to save money off each purchase, so if you can keep spending under control, could be worth getting to save the most on what you purchase the most outside of necessary expenses.

Carrying Over a Balance

Probably the worst thing you can do as a customer, but what the credit card companies thrive on, is carrying over a balance so that you can be stuck with the APR, which on some cards, could be upwards of 16%, adding a huge portion of the payment depending on the balance that you are carrying on the card.  If you can pay off the full statement balance by the due date, then using a credit card is actually financially smart.

Not Using a Balance Transfer

If you are stuck paying a high interest rate on your outstanding balance then perhaps it’s time to do a balance transfer where you can catch one for 0% and really have your monthly payments go towards chipping away at the balance.  Keep in mind there will be a transfer fee, which could 3-5% of the transferred balance, which depending on the balance, could be a few hundred dollars, but would still be worth it if you figure how much you are saving on interest over the long haul.

Expenses You Can Look to Reduce this Year

While you could look to an opinion outpost to give you all of the answers, the truth it it’s up to you to make your own financial decisions and in order to free up extra money each month so that you can build an emergency fund to give you a cushion in case of unexpected expenses, not to mention fund your retirement account so you are prepared when you do finally decide to walk away from work, you need to reduce monthly expenses right now.

Get Rid of Cable

This may be a tough one to swallow, but think about how much TV you actually watch, or better yet, how many channels you actually sit down for, not including flipping around for what is most likely “nothing on” anyways, or a string of commercials.  If you can spring for a streaming service for around $10 a month you can still watch quality shows, even getting an HD antenna so you can still get local channels, it’s probably closer to a reality that you can cut the cable cord and go ahead and save yourself at least a hundred dollars a month.

Reduce Going Out to Eat

This may be more difficult than getting rid of cable, is having someone serve, prepare, and clean up after you when you go out to eat.  The problem is that the costs add up pretty quickly and feeding yourself, let alone an entire family can just be a waste compared to what it would cost if you just went to the grocery store and prepared your meals at home.  Even stopping for coffee can add up over a course of a month so you can even time for your coffee to be brewed by the time you are ready to walk out the door for work in the morning.

Limit Impulse Purchases

Think of when you are at the grocery store without a list, walking up and down each aisle, loading any item into your cart that looks good, especially if you go on an empty stomach, everything looks great, and pretty soon you’re paying through the roof compared to what you had planned, and by the time you get home you wonder why you bought all of these items that now not only hurts your wallet, but also your waistline with all of the junk food purchases that you made.

Boost Your Credit Score

You may not think that credit score has a lot to do with monthly expenses, but think about the bills that are due each month when it comes to the mortgage, any outstanding loans, or interest that you’re paying on a credit card balance that you carry over each month.  By improving your credit score, you can take advantage of the best interest rates on the market and lower your monthly payments if you refinance, take out a new loan to pay off the existing, or get a better credit card and cut up the old one, especially if that new card has rewards that you can earn cashback.

Be Frugal and Avoid Just Being Cheap

Living the frugal lifestyle is a great way to free up extra money each month.  After all, it’s important to build an emergency fund of a few months’ worth of expenses to give yourself a cushion if any large unexpected charges come in, a lowes build and grow, or being able to float yourself for a few months in case of a sudden job loss, not to mention save for retirement, which will come quickly and you don’t want to be unprepared.  There is a line to cross though from being frugal, to well, just being cheap.

Have Proper Tipping Etiquette

If you have been out with a group for dinner and drinks and you just decide to split up the bill evenly, there always comes to a point where you are still short when factoring in a tip, where one or two always short money for a tip and others have to throw in a few extra dollars to make up for it.  Unless service was just terrible I can see dropping down what you were going to leave, but otherwise it should be standard to leave at least 20%, otherwise maybe you shouldn’t be going out.

Keep the Free Samples to a Minimum

Going to places like Costco where they have free samples available in virtually every aisle on the weekends takes the burden away of going shopping and fighting crowds a little, but there those that crowd around the toaster oven waiting for the fresh batch to come out, and when they do, basically take the whole tray back for them and their mooching family members as well.  Be cautious, grab one and keep shopping, they are samples for you to try, not providing a substitute for buying lunch.  After all, it is to entice you to buy the product.

Cutting the Cord but “Borrowing” Passwords

With the price of cable continuing to go up every year, not to mention if you really sit back and think about the number of channels you actually do watch in a given day, probably doesn’t add up for the need to continue to pay a couple hundred dollars a month so you may decide to cut the cord.  While that is all good, you should still buy an HD antenna to get local channels and then subscribe to the many $10 a month streaming services, but it is those that cancel cable and borrow your Netflix password that it crosses from being frugal to being very cheap.

Regifting

As you get older it really does provide more satisfaction to give someone a gift instead of receiving one, and I’m finding myself putting more thought into gifts each year and gone are the days of gift cards.  What is annoying those are the clear regifted items that just make you cheap.  I think of the movie Old School where Frank keeps trying to give away his bread maker that he got as a wedding gift.  It’s probably better to not give a gift at all instead of one day being caught for regifting.

Focus on Raising Your Credit Score in 2018

There’s plenty of talk about a resolution to lose weight, but what about your finances?  How about your credit score?  Those seems to be targets that are more important than probably losing ten pounds for beach season.  Instead of spending your days asking what a aaa membership cost, how about taking a hard look at your credit score and look for ways to improve it, so you can take advantage of the best interest rates on the market when looking for a mortgage, loan, or a new credit card.

Review Your Credit Report

There is so much fraud these days that you never know who has your information at this point, so it’s a good idea to check to make sure that your credit report is up to date, and more importantly, accurate.  The three major credit bureaus will provide a free copy of your credit report once a year so you can review, although it will not have your score.  You can see your credit score month over month on your credit card statement, which now lists the score each month so you can make sure it’s trending in the right direction.

Never Miss a Payment Due Date

One of the most influential pieces of your credit score is history.  Now paying past the due date will not hit your credit, although you could be in for a late fee or interest rate spike.   Any late payments that are thirty days late and more will severely damage your score so it’s always important to make sure they are paid by the due date, if not earlier.  The more you continue with on-time payment you should see your score rise as you are establishing a positive credit history, showing lenders that you are a responsible borrower.

Eliminate Debt

Just as important to your score as payment history is the amount of debt you carry, in other words, the credit utilization between the balances and the overall credit limits that you have.  If you have, say, multiple cards but only have a balance on one, your score should be improved instead of maxing out one card.  The more you pay down your debt to the overall credit limit the more you will continue to see your score improve, and not only that, less interest payments that you will need to make once you get rid of your debt and are in the clear going forward.

Consolidate Balances

Whether it is taking out a new credit card offer for 0% APR to transfer balances, or even taking out a debt consolidation loan, by weighing the pros and cons being having the debts paid off sooner than making minimum payments vs, cost, it may make sense to combine your balances and consolidate debt so that you can get a handle and finally be debt free.  Once debt is paid off you can focus on putting your recently freed up money to more important areas such as building an emergency fund and saving for your future.

Why You Should Use a Credit Card for Christmas Shopping

One can argue that you should use a credit card for all purchases you make in a given month, but if you are afraid to totally rely on a credit card I don’t blame you, after all, it takes discipline to keep the balance down enough so that you can pay it off entirely by the statement due date, otherwise interest starts to incur.  If you want to try out baby steps and just use for Christmas shopping only, then you can start to see why using credit cards actually make plenty of financial sense.

Better Fraud Protection

When you use your debit card and your card gets compromised, your entire checking account could potentially get wiped out if you don’t catch the fraudulent charges in time.  Sure, you can dispute them, but what if you have bills pending that need to be paid.  The delay in getting the disputed charges returned to you could put your finances in jeopardy, so at least with a credit card if your information is taken and charges are made, at least they’ll remain pending until resolved without putting you on the hook.

Build Up Rewards

Probably the best reason to use a credit card and why it can be argued to be used for all purchases are the credit card rewards.  Now I don’t know if say a victoria secret credit card would give the same perks as the other cards out there, but by making purchases that you would normally make anyways you can earn points to redeem for gift cards to restaurants, earn points for free hotel rooms, or just accumulate dollars that you would receive in a check back to you once a year, either way, not using a credit card is like essentially leaving free money on the table.

Improve Credit Score

You may that that credit score is not important, but if you ever want to buy or refinance your home, get a personal loan, car lease, or even employment, then credit score really does matter when it comes to showing if you are a responsible borrower or not.  While it will not help your score to carry a balance over each month as that would add to your credit utilization, by charging and paying off each month it can not only improve your score with on-time payments, you can also gain credit line increases as well which will add to your overall credit available.

Simplifies Spending

It can be a lot to juggle cash, debit, credit, while staying within a budget and not going overboard.  After all, if you continue to pile up the charges sooner or later you will have to pay them off, so why not simplify purchases with say a credit card.  You can earn rewards while you are making purchases, give yourself a little grace period of paying back, and only have to track purchases on one account and statement to review line by line to see what you purchased the month prior to see any room for improvement.

Money Moves to Make Now to Improve Finances

As we wind down 2017 it can be a great time to reflect back on what we accomplish this year, and what we did not.  Like most of us who create a resolution probably stuck with it for a while, only to give up and go back to living normal life.  While most strive to lose weight, others can focus on getting finances in order.  There is still time to make good on your resolution and set yourself up for success in 2018.

Finalize Tax Write-Offs

Whether you are not sure if you are going to owe and want to make the most of your return, are feeling charitable, or it’s ok to admit a combination of both, now is the time to finalize tax write-offs before the year ends, so there are still a couple weeks.  Take a look in your closet for clothes you no longer wear, check the basement storage for items that may have collected dust, or kitchen items that you are needing to replace soon, all can be great items to donate to the less-fortunate and get a tax write off in return.

Create a Budget

It’s no surprise the most American’s do not use a budget, two-thirds in fact, so if you are in a place where you find yourself living paycheck to paycheck, it may be time to look to free up extra money and keep a clamp on spending, where you may have not in the past.  Who knows, you may be finding out that more money is going out than coming in, and find yourself getting further into debt.  By creating a budget, you can work on allocating funds to monthly bills, food, gas, and spending, and continuing to tweak to make sure there isn’t too much/too little.

Look to Reduce Expenses

If you are looking to free up extra money each month, if you can reduce the amount you’re spending, both in monthly bills and spending money, you’ll be on the right track to see the savings adding up.  Whether it’s going grocery shopping instead of eating out, checking is lyft cheaper than uber, or cutting your cable bill altogether, you may have to think outside the box, while making sacrifices along the way in order to reach the final goal, which is having no debt and having enough saved up for in the future during retirement.

Increase Savings Contributions

While retirement may be decades away still, that is all the more reason to start saving now, the earlier the better, so that it can continue to grow over time.  Whether you are not contributing anything, to having a large percent of your pay going, now that the new year is coming soon, it’s time to increase contributions even further, even by a percent, so you don’t feel the burden as much, as your money is leaving your check and going into your retirement account.  I know you’d rather spend it now, but you will need it to live off when you are finally ready to walk away from work.

How Credit Card Debt Can Quickly Spin Out of Control

In this cashless society, relying pretty much on credit and debit cards, especially with the ease of purchases between online shopping and swiping in-store, as the purchases continue to pile up, so does the credit card debt.  When you carry a balance over to the next month is when things can start to add up, now that you are paying interest and the monthly payment will need to be large enough to cover interest and chip away at the balance, before credit card debt can spiral out of control.

Charging to Earn Rewards

Rewards is probably one of the best perks when it comes to using a credit card, earning free money on the purchases you would be making anyways, whether that is in the form of airline miles, points to redeem gift cards, or even get a cashback check each year.  The problem is, once you start to see the rewards adding up, you may be tempted to start making extra purchases just for the rewards.  If you start to carryover a balance and pay interest, that would probably outweigh any rewards you would get in return anyways.

Lack of Emergency Fund

You never know when a large unexpected charge will come up, whether it’s an auto repair, home appliance replacement, or vet bill, that can put a strain on you if you don’t have the available funds and need to put on a credit card, trying to figure out how and when to pay back.  If you can set aside a few months’ worth of reserves, that would give yourself a nice cushion in case something comes up.  From there, saving your retirement would be your next bet, whether that’s a  401k vs ira, it may be best to consult a professional on your best option.

Using Credit Instead of Cash

When you pay with cash you actually see the money leaving your hand and going into the cash register, watching your hard-earned money leave pretty quickly, probably enough to make you wonder if the purchase is worth it in the first place, going back to the days when you would actually think about it and come back to finally make the purchase.  These days you can just swipe your card with no worries, that is until the bill comes in and scares you, but there really is no second guessing when it comes to swiping your credit card.

Not Tracking Purchases

If you don’t know where your money is going, now is the perfect time to take a look at last month’s credit and debit card statements and actually go line by line and see what and where all of your purchases were.  From there you can take a look to see which ones were necessary monthly bills and expenses, and what probably could have been avoided.  A good place to start would be looking at food expenses, specifically going out to eat, something you could have avoided if you would have gone grocery shopping and prepared your meals at home, for a fraction of the cost.

Smart Ways to Become Financially Successful

Handling the household finances can, I mean, is a tough job and is not to be taken lightly.  The wrong money moves and you could be set back years in debt, while risking saving for the future.  Whether it’s a family or friend that you can trust, or the opinion of a professional, it’s always a good idea to make sure that you are maximizing the potential of the finances, to make sure you are in good shape going forward, on the path to becoming financially successful.

Preparing for the Unexpected

You never know what life will throw at you, so it’s always a good idea to be as prepared as you can, so you don’t have to throw money on a credit card that you not only can’t afford right now, but will most likely not be able to pay back right away anyways, even years of debt.  If you are able to stash away a few months’ worth of expenses, you can be prepared in the even of an auto repair, vet bill, or even be able to cover you if you were to suffer an unfortunate job loss.

Living Within Your Means

While it may be common sense that you need to make sure that your income coming in is more than the amount going out, so that means making sure the expenses are within what you are able to comfortably afford, and not racking up a credit card bill that you are not able to afford, just to keep up with those around you.  We all make different salaries and can afford more or less than our peers, so instead of it being a competition, do what is best for you, as you will not regret it in the future when you don’t have mounds of debt to deal with.

Saving for the Future

Speaking of the future, there is not much more important than making sure you are able to not only keep up the lifestyle that you have right now, but that you have enough to survive on.  We cannot be sure that Social Security will be there, and even that it’s not going to make you wealthy, so it’s best to save for retirement, and the early you can save, the more it has to make money over time.  If you can take advantage of employer-matching contributions, you can avoid leaving free money on the table and earn even more.

Adjusting Over Time

Expenses change along with life, such as getting married, having kids, buying a new house, in that you need to be able to be flexible and adjust your budget and spending to ensure that it’s not only up to date, but still a working model and efficient for what you are actually needing in allotting of funds.  It’s no secret that most either don’t have a budget or had one but it failed, so if you can keep it going and updating as you go, you could be in even better shape financially for the present and future.

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