For many of us, managing finances is one of the toughest parts of daily life. Sometimes, it seems as if no matter how much money we make, we can never quite catch up or get ahead. Although in some cases that might be due to simply not making enough to cover basic costs of living, many of us make very simple money mistakes that keep us from attaining financial stability. Below are seven common money mistakes people make that, if reversed, might help you get out of the red.
Making a purchase because you “deserve” it.
You work hard and want to enjoy life. We get it. But entitlement is a dangerous area to enter when it comes to money. Just because you might deserve that new dress or vacation doesn’t mean you should buy it. Don’t confuse what you feel you deserve with you can realistically afford.
Not saving.
Everyone should have a savings account to fall back on in times of financial difficultly. It doesn’t matter how much you can afford to contribute at first – if all you can manage is $10 each week, then start there – just get started on building up that nest egg, even if it means you have to go without a cup of coffee or two each week.
Spending to make yourself feel good.
If you find that you’re frequently shopping – and often spending money you can’t afford – to make yourself happy, then you might require therapy to help you work through the issue. Assuming you don’t have a deeper issue, keep in mind that even though buying a new purse might make you feel good today, it might cause you a lot of anxiety two weeks from now when you’re staring at a low bank balance.
Not setting financial goals.
If you simply live in an “I’ll spend what I make” mindset, you’ll never get ahead. It’s important to set financial goals for yourself. Would you like to buy a house in five years, reach a certain balance in your savings account or take a big trip? Set goals for yourself and then develop a plan for reaching them.
Eating out too much.
When we’re busy and don’t have much time to cook, restaurants and delivery services become a default solution. However, this can suck away hundreds of dollars every week. If you can afford it, there’s nothing wrong with treating yourself to dinner out once in a while, but creating a food budget and sticking with home-cooked meals can help you save big bucks.
Trying to keep up with others.
Just because your friend can afford something doesn’t mean that you can – and all the credit cards in the world aren’t going to change that. Don’t pretend to have more than you do or get sucked into a “keeping up with the Joneses” mentality. There’s no shame in the fact that you can’t afford a fancy haircut or designer clothes – and anyone who would pass judgment on you based on those kinds of things isn’t worth your time, anyway.
Not taking advantage of corporate benefit plans.
Does your company offer profit sharing, match 401k contributions or have another type of financial benefit plan that you haven’t bothered to join? Pay attention to these! You can both make and save money by participating in these types of plans, and help secure your financial future.
