Most of us believe we are good at handling our finances. We may splurge on an overpriced cup of coffee from time to time, but in general not spending too much money shouldn’t be difficult. Still, there are some money mistakes that can seriously disrupt you and your family. In order to be able to avoid them, you should first identify them. That’s why we have come up with 5 most common financial mistakes and tips on how to steer clear of them.
“Saving” by Using Your Credit Card
Of course, there are ways to save money by using credit cards but doing that can be quite difficult. These aren’t designed to save you money but to give the creditor a healthy return. If you are using credit cards, make sure you never get fooled by the stores that offer discounts for purchases with a charge application. Also, never buy something on credit unless you are absolutely sure you will be able to pay off the whole debt on time. Experts also say that having multiple lines of credit is a mistake, since keeping track of so many different payments can be very hard.
Buying Cheap Stuff
No matter what you are buying, investing in a low-quality item is never a good idea. Quality furniture, clothing and household goods, never come too cheap. This means that spotting a low-quality item should never be too much of a problem. Usually, high-quality items will last longer and work better which makes them a much better option. This especially the case when it comes to health, security and safety. Also, make sure you always value quality over quantity. Even if you can get two t-shirts for the price of one, bear in mind that getting a higher quality one is a much better choice.
Dealing with finances is never easy and that’s why it’s always better if two people do it. So, if you’re married, make sure that finances are not just one partner’s responsibility. This is a red flag because it leaves the other partner in dark and in no place to take care of finances while the other partner is not able to do it. You can do this by making a centralized record of all the account numbers, addresses and bills that have to be paid. Also, it’s always advisable that you and your partner set some money aside for emergencies.
Making Bad Investments
There will always be some occasions when you simply have to spend big amounts of money. In such cases, it’s absolutely necessary that you do your homework and make sure you are investing your money properly. Many people don’t do this and end up making bad investments and losing their money. For example, if you are buying a new car, you always have to be sure you are getting the best deal possible. Investing in real estate is always a good idea, but you also have to check everything before you make any purchases. Doing research online or contacting someone who deals in that line of business can be of much help.
Teach Your Kids about Money
A large number of people believe that there is no point in burdening their kids with finances. Unfortunately, this practice leaves young ones completely unaware of spending money and importance of saving. First of all, this can hurt your family’s budget quite a lot. But even worse, it can reluctant to start working once they get older. In order to make sure that none of this becomes an issue, you should think about teaching your kids some money basics. Setting up a commission system in your home, where your kids get their allowances according to chores they do, is always a good idea.
All in all, what you keep is much more important than what you earn. Make sure you avoid these mistakes and you are guaranteed to keep hold of your hard-earned money.
Tracey Clayton is a full-time mom of three girls. She loves cooking, baking, sewing, spending quality time with her daughters and she’s passionate in writing. Her motto is: “Live the life you love, love the life you live.” Find her on Facebook.
Senior Outlook Today is your go-to source for information, inspiration, and connection as you navigate the later years of life. Our team of experts and writers is dedicated to providing relevant and engaging content for seniors, covering topics such as health and wellness, finances, technology and travel.