Money Mistakes People Make


To help you get in control of your finances we’re talking about 10 completely avoidable money mistakes you should avoid. For many Americans, money is a constant source of stress. According to Money magazine, 70% of married couples argue about finances. More than half the fights stem from what one spouse saw as a “frivolous” purchase.

Making  financial decisions isn’t just about providing for the distant future instead it’s about cutting down on the very concerns you feel each day. To help you get in control of your finances, this podcast discusses 10 potentially avoidable money mistakes you could avoid.

Spending more than you earn:

Let’s start with the costliest mistake of all – not doing math correctly. If you spend more than you earn, it always catches up with you. This is not to say you have to pay for everything with cash; mortgages and student loans are a practical reality for the vast majority of Americans. Still, it’s crucial to make a realistic budget and stick to it, so you live within your means.

Not saving anything:

Intelligent people can disagree over precisely how much you need saved for a rainy-day fund or to provide for comfortable retirement. But not saving anything, and living paycheck to paycheck? That’s just irresponsible. Not only does it provide no opportunity for things such as buying a house, it naively assumes you won’t ever need the money for a rainy day should something unfortunate happen.

Living in a place you can’t afford:

Most financial experts say you shouldn’t spend more than one-third of your take-home pay on housing and related expenses. This is especially true for those who don’t make much money, because other bills will quickly gobble up the rest of your budget. Think of it this way: If you take home $2,000 a month but spend half that on housing, you have $1,000 left to survive. That works out to $33 a day for all your food, gas and everything in between. If you stretch yourself too thin on your housing expenses, you will struggle to pay for everything else and may never be able to save.

 

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