Handling the household finances is a tough job, after all, it means keeping track of money coming in, going out, not to mention saving for the future, ensuing you have enough to live off of during retirement years, not to mention, if you have kids, paying for a wedding and/or college. Any slip ups of any money moves and you could be on the path to going broke pretty quickly, so it’s always a good idea to bounce ideas of successful family, friends, or a financial advisor.
Putting Every Purchase on a Credit Card
Credit cards can actually offer great fraud protection and rewards is used correctly, but it’s easy to see how credit cards can lead to a financial downfall, as speaking as someone who used to have credit card issues. By putting every purchase on a credit card there really is no stopping you from holding back on purchases, I guess until you hit your credit limit, so you really need to have discipline when using a credit card, know what you are able to afford and pay off by the due date.
Not Keeping Track of What You’re Spending On
Going along with careless spending, you can spend all you want throughout the month, but if you don’t look back on the purchases you made to see if they were necessary or not, you may not make the spending adjustments that you need to make in order to succeed. If you can look back at the previous month’s credit and/or debit card statements you can look line by line where you actually spent money on. To take it a step further circle the necessary purchases in one color and then circle what probably could have been avoided. I bet you could add up a few hundred dollars’ worth of purchases right away.
Putting Off Saving for Retirement
Although it seems like the furthest from your mind, and sure, it may be decades away, but the earlier that you can actually start saving for retirement the better off you will be. First is getting into the habit of missing out on that money, so if you can start lower and then increase each year it will feel less of a burden. Look to take advantage of any employer-matching contributions, which if you are not contributing that maximum, it would be leaving free money on the table that could add up to tens of thousands down the road.
No Cushion for the Unexpected
You never know what life will throw at you, so it’s always good to be prepared, especially if you think about how you would pay if you had a major auto repair, medical bill, or even covering during a job-loss. Probably would put on a credit card and set yourself further into debt. If you are able to set aside a few months’ worth of expenses in an emergency account, you can have a cushion for any unexpected charges that were to come about at any occasion.