Four financial mistakes to avoid
Mistakes in our financial world shouldn’t bring our current house tumbling down. Too often, though, they do. And it’s only because we’ve let our self into some pretty bad behaviors that, when our finances encounter a rough spot, it brings havoc in our lives. Here are four financial missteps to avoid helping keep your financial house on a firm foundation:
Avoid these financial mistakes
Too many credit cards
Too much credit gives you a false sense of your real income. This can happen any number of ways. You may not think of that big box purchase as a credit card, but in effect, it is just specifically for that store. Shut down lines of credit, in-house accounts, close all but one or two credit cards, and keep those balances well below their maximums. Better yet, pay them off every month.
Spending as a hobby
When you don’t have money, don’t tempt yourself by spending Saturday afternoon in the mall, or browsing online, or flipping through glossy pages of your favorite outlet catalog. Put them away, throw them out, and do something-anything-else to get your mind off spending money as a hobby. Instead, go to the park, volunteer at your local pet shelter, or take the kids to the library for reading the hour.
Paying everything at once
Sometimes, you cannot pay everything at once. Those are hard times, indeed, and you need to choose what you’ll pay first. A roof over your family’s head and food on your table are non-negotiable, no matter what. You can afford a credit card being shut down much better than you can afford a foreclosure on your home.
Ignoring your assets history
When did you last check your credit score? Too often, we ignore our credit rating at our peril. Check your credit statement at least once each year. It can be a useful financial wake-up call. And, unless you check, you cannot know whether you’ve been dinged in error for missing payments, non-payment, or other problems that lower your credit rating. It’s worth your time to make sure what’s on your credit report is accurate and up-to-date.
Money management is about taking the time to know how much you make every month, and so what you can truly afford, and then not spending beyond those limits. It can feel very rewarding at the end of each month when you have paid all your bills, and even have a little left in the bank for emergencies.