Do you see yourself turning over furniture, looking through drawers, under the mattress, under the bed, and pockets of jeans to find change? If you become frantic during the end of the month when payments are due, you are not alone in this. Most of us have been in your shoes and it’s due to our negligence to save money. Most importantly, you have yet to realize where you are going wrong. We are here to help point you in the right direction, which leads to amazing savings, if you do it right. Here are the seven disastrous mistakes that most of you with money tend to make:
1. Are You Guilty of Sabotaging Your Savings?
Whatever you do, don’t touch your savings. Seriously, your savings act as your lifeline. They keep you alive and kicking; not literally, of course. Without your savings to help you out in dire financial situations, you will find yourself in a financial mess. One wrong move, one lapse in financial judgment, and your savings will go “poof,” into thin air. If you have money stored in a safe place, wipe it from your memory, and assume that you never saved money in the first place.
2. Do You Have a High Balance in Your Checking Account?
Some people have a habit to deposit their salary immediately into their bank account. The salary, then sits there catching dust. Although this is an acceptable habit to adopt, don’t you think that you can do something else with the money sitting idle in your ATM? Invest the money in a lucrative opportunity, for instance. The recommended route to take is to employ a financial planner to help you decide where you should invest your money in.
3. Are You Neglecting to Make Payments on Larger Expenses?
Sticking to your budget, by all means, is a commendable trait to possess. However, even sticking to your budget can have its drawbacks. In order for you not to exceed your budget, you cut back on drinking coffee, going out to restaurants, buying less, amongst other things, but what about your other expenses such as the mortgage of your house and car payments? Are they being paid? Instead of cutting back on minor purchases, save up money to tackle the much larger and looming expenses.
4. Are You Buying Extended Warranties?
You have to give salespeople props because they are extremely good at their jobs—Or selling the lies of extended warranties. Extended warranty is like putting your money down the toilet, flushing it away, and never seeing it. We bet that you took out an extended warranty on something you bought, but never ended up using it, which is a complete waste of money, don’t you agree? Next time the salesperson asks you if you want extended warranty, just say NO!
5. Are You Frugal?
Extreme frugality can send you in a downward financial spiral. Your frugal methods will do more harm than good to your bank account. Therefore, people that buy the cheapest option are exhibiting signs of unstable frugal behavior. If you are a person who drives extra miles to get cheaper gas or buys an inexpensive used car with tons of miles, only for it to die on them, may need an intervention.
6. Do You Improve Your Credit Card Score Before Making an Expensive Purchase?
If you go to the effort of improving your credit score right before an expensive purchase, you are doing it wrong. Instead of neglecting your credit card score, until it’s time to purchase a car or take out a loan, pay attention to it months in advance. It’s unfair to make your credit score wait, as it’s the deciding factor for lots more important things. You better start giving it your undivided attention, starting from now.
7. Do You Make Additional Mortgage Payments?
People with low interest rates on their mortgage payments should count their lucky stars, as it allows them to save up money and increase their wealth. They should not worry about making large mortgage payments as long as their capital is on the increase. You may, down the line, pay off your mortgage, but in the meantime, think about all the money that is at your disposal. For people with high interest rates, well, that is another story for another day.
Take a deep breath, relax, and avoid making these blunders with money.
A Selection of Money Quotes
“There are people who have money and people who are rich.”
~ Coco Chanel
“Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has the more one wants.”
~ Ayn Rand
~ Money cannot buy peace of mind. It cannot heal ruptured relationships, or build meaning into a life that has none.”
Richard M. DeVos
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