It goes without saying that clever people learn from the mistakes of others. Though, there is a question whose experience we can rely on? Probably, you have heard contradicting opinions from friends and colleagues.
So, why not to take into consideration observations and conclusions made by experts of various industries to become more successful?
Mistake #1. Savings
While savings are a must-have for most people, they can simply become a problem for those who can’t use them wisely. Typical mistake connected with savings is keeping your savings even if you urgently need them – for health care, for paying rent, for car service.
It is the silliest decision ever that is connected with savings. Once you spare your savings now, further you will have more problems which will require even more money. So, solve your financial problems at early stages. Of course, it has nothing to do with shopping and hanging out.
P.S.: Here are 5 bad money-saving tips you should never make.
Mistake #2. Credit
Your credit or credit purchases may become a financial problem too. It happens when your purchases make more than 20% of your income. For instance, if you earn $30,000 a year without taxes, $6000 is the amount of money you should spend on credit purchases not including a mortgage. Use your credit wisely.
Otherwise, you will have financial problems by the end of the month. If you already do have problems with your credit, then find out how to restore your credit score and even borrow money.
Mistake #3. Borrowing
It happens that sometimes people urgently need money, so they turn to their friends or professional services to borrow them. Borrowing is okay when it comes to serious purchases like buying a car or apartment or paying for courses, education.
Otherwise, if you borrow money to pay for your usual lifestyle, you will likely regret this when your friend will ask to return them. Of course, you don’t necessarily have to borrow from friends, as it may ruin your good relationship. Which is why we recommend you reading about 6 cases when borrowing money is the best solution.
Mistake #4. Retirement
Some people, especially young and green one, tend not to think about retirement. They think that this time is far away from them, so they can not think about it in 25 years. Still, this policy is wrong as accumulated money may save you in 55 years.
Therefore, starting saving for retirement at the early stages is a mature idea that will be highly estimated by 60 years-old you.
Mistake #5. Taxes
Some people, especially inexperienced one, tend to withhold too much for taxes from their paychecks. This way they just provide the government with an interest-free loan.
But if they increased their number of exemptions or withholding allowances and put that extra money in an investment account, they would stay in the win. So, don’t copy the mistakes of green novices. Be one step ahead.
Mistake #6. Tax Refund
If you have an opportunity to get the tax refund immediately, don’t use it. A refund anticipation loan that is usually offered requires a percentage fee. Therefore, a cash advance on your credit card is a cheaper thing.
Mistake #7. Cancer Insurance Coverage
Some insurance companies manipulate people’s innocence and valetudinarianism and offer completely unnecessary paid services. One of such services is cancer insurance coverage.
Why is it so unnecessary? You don’t need this insurance if you already have medical coverage! A cancer-only policy here is inappropriate. If you would like to learn more about health insurance options, visit this page.
Mistake #8. Debt for Car
Some people decide to go into debt for a car but don’t realize that the car is hardly an investment. Therefore, it would be more logical to pay cash for it.
Furthermore, don’t seek to buy a new car. Start with a used one that has a lower price and insurance. Besides, find out how to save money on car insurance.
There were the most common financial mistakes that, actually, can be easily avoided. There are much more and maybe in the next articles we will describe them and offer a reasonable solution. But right now ensure that you don’t make the aforementioned mistakes.
Do not forget to read our How to save money in February tips.