Do you consider yourself on-top of your finances? Do you only shop sales, limit dinners-out and mostly bring your lunch to work? If yes, sounds like you’re on the road to getting your financial ducks in a row. But are you making these four money mistakes?
1. You aren’t saving for retirement. It’s so easy to blow off contributing to your work’s 401k plan and instead cushion your bank account with the extra funds. Part of every dollar you make during your “working years” should help to fund those amazing years when you won’t be working. If your company doesn’t provide a 401k just open an IRA–it takes minutes and you can set up a direct deposit from your checking account.
2. You don’t have a budget. Many people we know spend what’s in their bank account and at the end of the month put what’s left toward credit cards. This unfortunately, is not a budget. Check out our article here on creating a real budget that follows the 50-30-20 rule.
3. You don’t have a plan for getting out of debt. Once you’ve created your monthly budget you can determine how much you can put toward your debt each month. Now do the math. How long is it going to take you to pay off that debt – and don’t forget to include interest. Is it enough? If not, then recalculate your budget. Once you have a plan for getting out of debt stick to it each month.
4. You don’t have financial goals. Think long-term. Are you saving for something? Are you investing your money? Are you creating a fund to purchase investment property? Create a financial goal that will make your money start working for you.