The art is not in making money, but in keeping it. Mistakes are made every day when it comes to money. These mistakes can turn into bad habits and bad habits eventually turn into a disaster. What can you do to keep your money? Learn from these six common mistakes:Emotional Spending
Emotional Spending is also known as Retail Therapy. It’s a fact, our emotions can cause us to go out and shop. This can also leave you in bad financial shape. Emotional spending can temporarily give you a boost in self-esteem, turn a bad mood into a good mood, relive stress, diffuse anger, ease boredom, and cure the blues. But is it all worth it. It’s only a temporary solution to the real problem and these impulses can take a financial toll on your bank account if you’re not careful.
Not Having a Budget
How will you ever know if you are truly living within your means if you do not have budget? Without a budget you also cannot dissect and pinpoint where you money is leaking out. Planning out a budget is not difficult. Simply put, having no budget, equals large consequences. You can start spending beyond your means and find yourself in very deep water. Use the budget to help you determine where you can cut out some spending and do some saving!
You need to have a savings account of some type. This isn’t just important for retirement but it’s also important in case you lose your job or some big expense comes up without warning. Shop around for your account. Find one with a good interest rate. You want to make sure you have some savings to hold you over, just in case.
Stay Away from Credit Card Debit
If you’re spending all your money paying interest on credit cards and installment debt, you won’t have enough money left for savings. The true cost of what you purchase on your credit card can double depending on your interest rates and when you’re paying it all off. Try and pay cash and stay away from credit card debt.
Letting a partner have total control of the finances can wreak havoc. If something were to ever happen where you had to take over the finances, you’ll need to know how to manage the bills, deal with financial documents and how to budget. Don’t shy away from these duties it will save you from problems down the road.
Building wealth isn’t about how much you earn each year, it’s about how much money you don’t spend. When you’re just starting out it’s difficult to find money to save. But even a little is better than nothing. Create a goal of saving a dollar amount or a percentage each pay cheque. Build up an emergency fund. Lack of goals creates a “should have, could have, would have” financial situation that may frustrate you. Take baby steps and work towards larger goals. Eventually your goal will seem attainable and become more of a habit and less of a burden.
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