Managing your finances can feel like a full-time job. And, even the most fastidious types can unwittingly make a mistake that harms their current and/or future financial well-being. According to Forbes, these are some of the biggest money mistakes people make:
- Not saving for retirement. Even if retirement is a long way off, it takes a long time to save enough money to live comfortably once you leave the workforce. Starting today, make sure to save part of every dollar you earn.
- Not understanding the true cost of student loans. Many students and parents of students see student loans as a standard operating procedure for getting through. Make sure you and your child know exactly what your monthly payments will be—and for how long—before taking out the loan.
- Not having a budget. You may feel that you have a good awareness of your income vs. expenses and, therefore, don’t need a budget. However, you’ll never have a true picture of how much you’re spending until you commit it to paper and track it religiously. Once you’ve taken this step, map out a budget and stick to it.
- Not having savings. Make sure your budget includes putting at least a little money away for unexpected expenses in order to build up an emergency savings. According to Forbes, your emergency savings should be enough to cover six months' worth of income. Therefore, when your income goes up, so should your savings.
- Not taking care of your credit score. You may think you’re doing all the right things credit-wise, but that may not be how credit-scoring firms evaluate your profile. Your balances may be too high, you may have too many credit cards, or you may have been late on a payment or two. All of these things affect your credit score, so be sure to check your credit report three times a year and dispute any mistakes you find.
Avoiding these mistakes will help put you on the road to financial peace of mind, hopefully leaving you a little money to spare.
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Published with permission from RISMedia.