Some of us are good with money and some of us aren’t. Some people make money mistakes and some people learn how to manage money wisely. We’re all different and that’s just the way it goes; however that’s not the way it always has to be.
Everyone makes mistakes and that’s O.K. We shouldn’t dwell on the past when it comes to financial mishaps; we should recognize the problem, take the necessary actions to improve the situation and make changes to help prevent making the same mistakes again.
You may think only young adults make mistakes with their money because they don’t know any better, but that’s not true. As a financial planner, I see people make financial mistakes at all ages.
Here are some common money mistakes and how to overcome them no matter where we are in life.
20-somethings keep swiping their credit cards.
20-somethings are eager to have it all and very often they don’t understand that it takes time to accumulate things. Racking up debt you can’t afford to pay off is a huge mistake, especially at a young age with an entry level salary.
Young adults should remember that you don’t need several credit cards, just one will do. Don’t accept every credit card offer in the mail, only accept the best offer. That may be a cash back credit card or a card with travel rewards. Remember to spend within a budget that you can afford to pay off monthly. Building a solid credit score will help you later on in life.
30-year-olds buy homes they can’t afford.
Have you ever heard the term “house poor”? That happens when people buy an expensive home they can’t afford. It’s nice to live in a place you love, but you need to ask yourself if it’s worth giving up all your other passions.
A first-time homebuyer should look for a moderate home in a reasonable neighborhood. There is no need to try and keep up with the Jones’. You may still be paying off your student debt and when you add in a mortgage payment, property taxes, furniture, utilities and maintenance costs the total can be more than some people can handle.
40-somethings forget about retirement
Not planning for retirement is one of the worst money mistakes. You work hard and probably want to retire someday, but that won’t happen on its own. It’s easy to get caught up in life and focus on other things such as buying cars and planning vacations, but don’t you want to stop working some day?!
Starting to save for retirement as early as possible is the best advice I can give. Even setting aside $25 into a retirement account can add up to a lot of money over time and at the end of the day saving a little bit of money is better than saving none at all.
50-year-olds ignore their credit score
If you’re in your 50s you may not be overly concerned with your credit score. But you should be. You just never know what can happen in life and even though we can’t plan for the unexpected we can try to be prepared in case of a financial emergency.
Keeping your credit in good standing and making payments on time is a good idea at any age because you just never know when you’ll need to apply for a loan or other types of financing.
Consumer Education Services, Inc. (CESI) is a non-profit committed to empowering and inspiring consumers nationwide to make wise financial decisions and live debt free. Speak with a certified counselor for a free debt analysis today
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