You already know how to save money in December but still you may be making some financial mistakes without even knowing that they are mistakes. Today we all are too busy and most people don’t find time to analyze their financial behavior. As a result, we have our current financial situation, but it’s time to stop for a while and to ask ourselves what brought us where we are now. Making mistakes is a part of life, but let’s figure out how to minimize it and which financial decisions and moves significantly harm our well-being.
As only you leave your home, you start spending money. A few dollars for this, a few dollars for that – it may seem that you’re frugal because you don’t buy expensive things and avoid big bills. It’s interesting, but quite often special deals which seem like they help us to save money make us overspend! People often think that paying a few extra dollars doesn’t mean anything and it can’t significantly impact a budget but such a way of thinking almost always has a negative impact on a financial life. Learn how to be a frugal shopper and remember that every dollar important.
Analyze the bills you’re paying month after month, year after year and ask yourself if you’re paying for really necessary things/services. Pay attention to a cable television, paid channels, different subscriptions, gym membership, cell phone bills and etc. Cancel all unnecessary services to save more money and consider ways to lower the necessary payments. For example, there are companies which will negotiate consumers’ bills with the providers and help people to save, so if every month your bills unpleasantly surprise you, it makes sense to turn to one of them.
Living in Debt
Today it can be complicated to find someone who doesn’t have a credit card. Too many consumers put their expenses on credit cards, use quick personal loans and other credit products and such a behavior already has become a part of their lifestyle. Borrowing money is easy but paying back from your own funds can be complicated and can start a chain of financial problems. It’s highly recommended to avoid such a situation in your life when you spend more than you make, so learn how to live within your means and control your money flow.
Living from Paycheck to Paycheck
Actually, living from paycheck to paycheck is not a mistake itself, but not building savings is. Many people spend all the money they earn till the last penny and don’t save any. They don’t have an emergency fund and any unforeseen financial problem makes them to borrow money. Do your best to avoid it, always build savings and try to save at least 10% of your monthly income to your emergency fund. To boost your ability to build savings, consider ways to make extra money and ways to make money from home. In case you’ll face a financial emergency or lose a job, it won’t be disastrous for you and your family.
Buying a New Car or a Big House
There’s a good quote concerning that: “We buy things we don’t need with the money we don’t have to impress people we don’t like”. Millions of new cars are sold each year but who buys them for cash? Just a few buyers do. The rest get in debt which they try to repay during the long years. Try to change your outlook for long term loans and think that if you don’t have cash to buy a new car then you can’t afford it. Also many people think that a bigger house is always a better house and get mortgages they repay within 10-20 years and often even longer. Buying a big house only makes sense if you have a big family, otherwise you’ll face unjustifiably large utility bills, mortgage payments and they will put a long-term dent in your monthly budget.