money mistakes to avoidManaging finances can be hard, especially if your household is stuck living paycheck to paycheck.

But even when times are tough, it’s important to master the world of finance to ensure you and your family avoid falling into a world of insurmountable debt.

Many of us make mistakes when it comes to managing our finances, but some of those mistakes can result in more severe consequences.

Here are some of the worst financial mistakes you and your family are probably still making, and what you can do to fix it.

Not Creating a Budget

One of the most basic financial necessities is having a budget and sticking to it. When left without a plan for their income, individuals without a budget will often find themselves scrambling around for change to pay bills or wishing they hadn’t spent so much at the bar last Saturday night.

Creating a budget doesn’t have to be as daunting as it sounds and could save you hundreds of dollars in the long run. There are tons of resources for budgeting depending on your specific needs, but a good rule of thumb is to designate a certain percentage of each pay check to a number of different categories, including rent, utilities, food, entertainment, savings, emergency, and miscellaneous.

Each time you get a paycheck, immediately split it into the designated category so you know exactly how much you have to spend in each area.

Sticking to a budget is just as important as making a budget. Outside of emergencies, don’t spend money from one budget in another category. Instead, find ways to make the budget you created work for you.

This way you will not need to look for legitimate ways to make money at home, each time you are running out of cash.

Not Building an Emergency Fund

If you’re struggling to pay your bills every month, setting aside cash for an emergency fund is probably in the back of your mind. But the truth is there are a number of problems that can arise that would mean disaster for you and your family should you be left without the funds to properly handle them.

If your emergency plan is to rely on credit cards or loans, you may find yourself falling further and further into a pile of debt impossible to climb out of.

One of the biggest reasons to invest in an emergency fund is the risk of losing your job. While there is some speculation over how many months of savings you should keep locked away in an emergency fund, three months of expenses is a good starting place.

Start placing a bit of each paycheck away into a designated account and before you know it you’ll have a safety cushion should anything go wrong.

Not Being Insured

insurance onlineWhen you’re paying monthly insurance payments, it may seem like you’re throwing your money away.

While paying into insurance can be a gamble and you may never reap the benefits of your policy, it could be devastating to you and your family should an emergency occur and you’re not insured or under insured.

It’s important to be insured in everything from medical to your car, but if you are the breadwinner in your family with dependents counting on your income, a life insurance policy may be right for you, too.

You don’t want to leave your loved ones scrambling to pay off your debt should anything happen to you. Check insurance options from Personal Money Service.

Relying on Credit Cards

If you’re relying on credit cards to make your monthly payments, you’re probably living outside of your means. Credit cards can be a great thing when used properly, but can also get you in a lot of trouble if you take more than you can realistically pay back.

A credit card should primary be used on items you know you can pay back within the billing period. For instance, there is this LA Lakers games that you can’t seem to miss, and you you’ve finally found best places to buy tickets cheap. But is this really the item you need so urgently?

When a bank gives you thousands of dollars in credit, it can be tempting to go on a shopping spree or make purchases outside of your budget. In some emergency situations, it can be necessary and helpful to have a credit card on hand, but with interest accumulating on your debt, you will most likely end up paying more than you would have with cash.

If you find yourself using credit cards to pay for things like bills or groceries without knowing where you’ll get the cash to pay off the bill, you should look at reevaluating your budget to one that better suits a realistic lifestyle.

Creating a strong financial foundation can seem like a difficult task, but for most of us it’s necessary for our future and the future of our families.

Taking just a few hours a week to research and plan can keep you from falling too deep into a pool of debt and keep you living a comfortable, realistic lifestyle in the years to come.