Are you managing your money as well as you think? Read ahead to see five common money mistakes and how you can fix them right away:
1. You Don't Have a BudgetYou spend without a plan, and you assume that you'll have enough in your account to cover those monthly essentials. This isn't the wisest decision. What if you make a miscalculation? What if you run out of money before your next paycheck arrives?
Instead of spending by instinct, you should download one of the best budgeting apps on the market and make a personal monthly budget. This simple financial tool will give you a clear idea of how to spend your money without going broke.
2. You Don't Save for EmergenciesPart of your monthly budget should be dedicated to emergency savings. If you don't stash away some savings for emergencies, you could get caught by surprise with an urgent expense and not have enough money to pay for it.
How can you fix this mistake? Start by putting together an emergency fund. Add some money into a savings account every month and watch the fund grow. Soon enough, you'll be able to handle small emergencies like car repairs or doctor visits without breaking a sweat.
If you don't have enough in your fund when an emergency expense crops up, you could apply for an online loan. It's an effective back-up plan when you don't have funds for surprise expenses and you're not sure what to do. You can cover the costs right away and then manage the repayment later on. But you should only turn to online loans when it's an emergency. It's not a good solution for your everyday needs.
3. You Don't Make Shopping ListsOne of the best ways to save money when you go grocery shopping is to make a list. This will keep you from straying from your initial shopping goals and making unnecessary impulse purchases. A list will also keep you from making mistakes, like buying items you already have in your fridge or forgetting to grab an essential ingredient for a dinner recipe.
Making the minimum payment on your credit card bills is a good strategy to avoid missing a payment and racking up late fees, but it's not a great habit to stick to. The small payment will barely put a dent into your outstanding balance, especially when you're collecting interest and charging more purchases onto the card.
What should you do instead? Pay more than the minimum every month. You want to keep your balance as low as you can afford to.
5. You Indulge in Retail TherapyWhenever you're feeling low, you participate in retail therapy. You browse online stores and pile items into your digital shopping cart. Before you know it, you've spent a chunk of your paycheck on stuff that you're not entirely sure that you need and that you're not entirely sure that you can afford. You can see how this could have a terrible effect on your wallet.
What can you do? Try to take on healthier coping mechanisms instead of shopping whenever you're feeling sad, stressed or bored. These will help you deal with your emotions without putting yourself into debt.
Your finances will be in much better shape the moment that you stop making these mistakes. It's time to make a change!
