Do you feel like you’re having trouble managing your money? Are you always meaning to put money aside each month but there never seems to be anything left after you pay all your bills?
You’re not alone. Millions of people are living paycheck to paycheck and have trouble keeping track of their finances.
If you’re one of them you need to wake up and realize that now is the time to take action and seize control of your money. The longer you let your money control you the more digging you’ll have to do to get out of the mess you’ve gotten yourself into.
Identifying where you have gone wrong is the first step to getting back on track. To help you get started, I’ve listed four of the most common mistakes people make with their money.
They have no idea what their credit score is.
This is a big problem among young people who just don’t realize how important it is to maintain a healthy credit score. Late of missing payments will destroy your credit and once that happens you will pay for your mistakes in countless ways.
Credit card companies will jack up your rates and charge you more interest than your neighbors with stellar credit. You’ll have to jump through hoops to find a lender willing to give you a mortgage and you’ll pay an arm and a leg for that too. Also, but a poor credit score can make it more difficult for you to get auto insurance, rent an apartment, or even get a job.
They have no emergency fund.
We all like to think that nothing bad will ever happen to us but how realistic is that?
The water heater breaks. The roof is leaking. You get into an accident on the way home from work. You get laid off.
These types of things happen to everyone at one point or another. If you’re financially savvy you’ll have an emergency fund saved up to cover these kinds of unexpected expenses. If not, you’ll end up putting them on a credit card and falling into the downward spiral of debt.
They have no clue where there money is going.
If I asked you to list a detail of your monthly income and expenses would you be able to do it off the top of your head? Or would you look back at me with a blank stare?
You don’t have to track everything down to the penny (though some people would suggest that you do) but you should be able to come up with a reasonable estimate of where your money is going.
Most people underestimate how much they spend each month and that is a recipe for disaster. A cup of coffee and a breakfast sandwich, a new blouse, a blu-ray of your favorite movie; individually these may seem like small purchases but they add up quickly, especially when you pay with plastic instead of cash.
It can be very easy to lose track of how much you’re spending, but if you start tracking these phantom purchases you might be surprised at how much money you’re wasting each month.
You might even discover that many of those purchases were unnecessary and unfulfilling. By eliminating them you will be able to free up cash for what is really important to you.