Tuesday, July 9, 2013, AM | Leave Comment
We all are trying to stay out of debt. There are just some financial mishaps in our lives that prevent us from doing so. We are either ignoring our financial responsibilities or keep track of them badly.
Here are 4 common financial mistakes to avoid in day to day life.
Going To Fast Food Restaurants
Some people have a habit of going out to eat too often. They either go on lunch breaks with co-workers or meet up with friends. Sometimes they may stop after work and pick up dinner. Some of this excess spending can be avoided and you can save your money.
If you dedicate an hour or possibly two analyzing sales papers, you can create a weekly menu for your home and save money. Instead of going out to eat at lunch, you can bring leftovers as long as you make enough food.
Not Setting up A Budget and Sticking to It
You may want to get out of debt. It’s a good start when you have sat down and organized all your debts and compared them to your income. This means you have created a budget. You can see exactly what is going on with your finances. The next step is making sure you give yourself an allowance. That’s the problem with budgets is we don’t allow ourselves anything to spend. So we in turn go over budget.
It’s true that to budget, you must cut out things like impulsive shopping or going out to the movies every Friday night. Instead, stay home and rent a movie or pick one up from the library. Whatever cash you do give yourself, once it runs out that is it. Set a budget for your gas, entertainment, and fast food allowances.
Using Your Credit Cards Instead Of Cash
A huge financial mistake people can make is using credit cards. More people are in the habit of checking their bank accounts more frequently than they will a credit card unless it’s linked to their checking account. The problem isn’t actually using the credit card. It’s when you don’t pay the balance off in full at the end of the month.
By the end of the month you don’t have the funds needed to pay it in full. At that point you have incurred interest rates and a balance. This is where people start to get behind and build debt. You should limit your spending to cash only and use your credit cards for emergency purposes. If you want to use your credit card for reward points, set the cash away to pay the card off at the end of the month.
Not Setting Up an Emergency Bank Account
A financial mistake that has come across every household at least once is lack of emergency funds. We may have every intention on setting up an emergency account and may have one set up but just have not contributed to it. Set one up so when you are backed into a corner you will not need to use credit cards or apply for loans.
This article is brought to you by Cambist.