It has often been said that money does not grow on trees. Since this is the case, it makes sense that you do not want to throw your hard-earned money away unnecessarily. Simple money mistakes can end up costing you a lot of money, but wise money decisions may mean earning a lot more. There are several money decisions you want to avoid.
Not Shopping Around
Almost any product you want to buy can be found somewhere else cheaper. With the Internet so readily available, finding those great deals online will not only save you money but also time. You hardly even need to go to a store anymore. Many places will ship the product for free when certain price levels are met.
When you invest in stocks or markets, be sure that you understand all the costs involved. While the advertised interest rate may sound excellent, it may end up being much less after you pay the fees. Other companies may have a lower interest rate but will not charge as much – making them a better deal.
Be Careful of Impulse Buying
One of the worst money mistakes that people make is impulse buying. Face it – some items are going to pull your strings every time you think about them. You will think: “I got to have it now.” While some people are more prone to buying on impulse, it will often come with regrets later on when you discover that you could have had it for much less somewhere else. Even worse, you may find a similar object with better features for the same price.
Not Paying Your Bills on Time
Although you may pay your bills, not paying them on time is going to cause two problems. First, you will end up paying more in interest and late charges. Secondly, it will ruin your credit score. Paying your bills late is one thing that will ruin your credit score faster than almost anything else. When you want to get new credit, it means that you will not be able to get the excellent interest rates you want, but it also means that you will not get as much credit as you may need.
Maintaining Credit Card Balances
Credit cards notoriously have high-interest rates, although some are more reasonable than others. Maintaining a balance on them is a financial mistake to avoid. Working toward eliminating your debt is a much better option – especially when you think about what you could have done with the money you paid in interest over the year. Ideally, you want to eliminate your debt completely. When you do charge something on your credit cards, pay it off completely when you get the bill. If you have a lot of credit card debt but still have rather good credit, consider getting a balance transfer credit card with zero interest – but do not add any more charges on the other cards.
If you invest in the stock market and try to pick your own stock to get the best gains, you will need to spend time watching them. If you do not have the time, it could result in lost money. It may be a better option to put your money into index funds and select one or two stocks to dabble with. This will give you more time and a more sure return.
Making money decisions that involve large amounts of money or long-term payments should never be done quickly. It often leads to common money management mistakes, which are going to cost you. Getting financial advice from a financial counselor can help you avoid common money mistakes.