7 Money Mistakes
Do you feel like you’re stuck in your financial situation, or in a money strained rut? If you find yourself working extra hard and living paycheck to paycheck just to repay debts and cover the costs of living, then it’s time to take a good look at the things you’re doing with your money.
Today, we’ll be talking about seven mistakes you could be making with your money that prevent you from getting ahead financially. Let’s get started!
1. Not Tracking Your Spending
Do you know how much you spend on gas, coffee, food, and utilities each month? If your answer is no or if you can only think of a vague answer then you need to start tracking your expenses and closely.
Don’t fall into the trap of not knowing where all your salary goes each month and overspending on things that can hurt your chances of getting ahead financially. When you keep track of your spending, you see exactly where your money goes which can help you decide which areas need a little help.
When you choose to track your spending it makes you think twice before shelling out your hard earned money to pay for something – because you’re holding yourself more accountable.
You can use a simple Excel or Google Sheets spreadsheet to track your income and your every expense or you can also use apps to help you out. Or you can choose to pick up a small spiral notebook to write down every dime you spend each day this will definitely help you resolve some of your money mistakes.
2. Purchasing Unnecessary Things
It’s ridiculous how easy it is to overspend on frivolous things:
Do you really need 200 cable channels when you only ever watch two?
Does your phone plan have extras you rarely use?
Do you get a large latte every single day at your favorite coffee shop?
Do you usually spend on brand name products thinking they’re better than generic ones?
If you answer yes to all of these questions then you’re probably spending your money on unnecessary things. Sure, life’s little luxuries are nice to have once in a while but these can easily add up and can hurt your financial situation.
You don’t need all the bells and whistles of a phone plan or cable subscription. You can always just make your own coffee at home. And yes, off brand items are often just as good as national brand counterparts.
Evaluate your spending patterns and take stock of the areas that you can live without or spend less on. This way, you can put the money you save on more important things like your life savings or retirement fund.
3. Not Having A Money Plan
Spending wisely involves mapping out how you’re going to use your monthly income. Having a monthly budget not only guides you in making wiser spending choices but it also helps you focus on your goals.
Every month take the time to sit down to prepare a money plan. List your income, expenses, and savings and allocate funds for everything.
Set goals, an attainable goal that you’re saving toward, so you’re more likely to stay on budget. If it’s a down payment for a car, or a house, or a vacation you’re looking forward to, just make sure you have a goal you’re reaching for and you’ll be surprised how that will change your thinking about spending.
Also, don’t fall into the trap of “We don’t make enough money to save”. Two things about that thinking: One – track your spending for a month and then study it and see if that’s really the case – or are there areas you can make improvements to save.
Two – if you really don’t make enough after you track your expenses and see, change your spending habits, or look for new employment or a way to make extra income (keep reading to learn how).
4. Not Being Consistent Managing Finances
A big part of getting financially ahead is being consistent with your financial management efforts. More than anything, saving, investing, and budgeting is a habit that you need to consciously pursue if you want to reach your goals and avoid money mistakes.
Even if unexpected expenses pop up once in a while, that shouldn’t deter you from getting back on track. Remember that staying consistent and not stopping at the first sign of trouble means the difference between living paycheck to paycheck and living with more financial flexibility.
5. Not Automating Your Saving
If you struggle with consistently saving then you might want to consider automating your savings.
You can set this up with your bank so that whenever you get funds, a portion of it immediately goes into savings. This way, you don’t have any excuses for setting aside a portion of your income for future use.
There are also apps you can use that will round up your spending to the nearest dollar and deposit that change in an account for you, that adds up in a hurry.
You might also like: 6 Ways To Start A Successful Budget Plan
6. Not Making Your Money Work For You
If you really want to be financially ahead, you need to plan for the long term. This means you need to make your money work for you.
These days, investing isn’t complicated at all and you can even start with very little money. You have various options including stocks and bonds, mutual funds, physical commodities, or treasury securities.
There are even apps that let you micro-invest whenever you use your debit card to purchase goods.
7. Not Having A Side Hustle
Whether you’re not making enough money every month to make ends meet if you are already making as much as you can from your day job, having a side hustle can help you reach your financial goals faster.
Take stock of your marketable skills and use them to make a little extra each month. This way, you don’t have to rely on just one income stream and you can easily put your extra income in your savings or invest it.
Do you have more ideas about money mistakes you may be making that are keeping you from getting ahead? Please share them with us, we’d all love to learn to get better at staying ahead of the game.