Solving Common Money Mistakes
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Stop Wasting Money
First, if you find yourself in financial downward spiral there is no need to panic. Anything and everything is repairable.
Examine every aspect of your finances to discover what lead you to make these poor money decisions, and then start taking steps to mend your ways.
Solution: Be honest with yourself and stop living in denial.
Financial difficulties will not dissolve overnight; however, the road to living debt-free does require immediate action.
Are You an Impulsive Shopper?
Impulsive purchases drive and keep you in debt, maybe deep debt. Do not try to keep up with your friend, coworker or neighbor.
The necessities (food, clothing and shelter), are everything that we physically need while everything else is secondary.
Solution: Learn to become satisfied with your life and live within your means.
Avoid shopping when you are bored. Always wait at least twenty-four hours before making a purchase, especially large purchases.
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Solution: Ignore sale promotions unless you really need that item. Walk away from the sales pitch or hang up the phone on the telemarketer. You can always decide later if the item is worth the price.
Do You Fall Victim to Sales Pitches?
Many companies attempt to influence consumers by manipulating them into believing that they need a particular item or service of their offering.
There is intense pressure from conniving sales associates striving to get you to make the purchase. Remember that they receive training to get you to make the purchase; they do not really care if you need the item.
Solution: Take out your last three bank statements and examine every entry. Here is where you will learn where every penny was spent.
Develop a budget and adjust your spending patterns accordingly. Stick to your plan!
Does Your Money Play a Disappearing Act?
Are you flat broke at the end of every month? Do you even know where the money went?
Many people do not realize how much money they spend everyday (even on those seemingly small purchases), nor how much debt they actually have accumulated.
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Solution: Set up an automatic savings plan and always pay yourself first. Begin by saving 5 percent. As you find more ways to cut back, increase your savings amount.
Are You Saving Enough?
Do you have a plan that involves some type of saving system? Failing to have a savings plan keeps you stuck in your current financial situation.
Solution: Research every purchase. Go to the library and browse through the latest issues of Consumer Reports.
Log on to your favorite search engine and type in the product in quotations ("whatever product here") to research prices.
Never Comparison Shop
Are you loyal to a particular brand? Maybe you think it would be too much trouble, or the savings would not justify itself to move your business elsewhere.
This reluctance to take action and move is called "spurious loyalty" and is the ultimate marketing goal for companies.
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Solution: Look for a low-interest loan to consolidate your debts. Refinance mortgages to a fixed low-rate and look for reasonable car loans through banks, credit unions and finance companies.
Taking Out High-Rate Interest Loans
Making minimum payments on credit card debt or taking out balloon mortgages and lease purchases are not the way to go for anyone that is serious about saving money.
Solution: Experts suggest having three to six months worth of your salary saved in an emergency fund.
Begin small if you do not have much money to spare. Setting aside $10 per week will translate to $520 in a years' time.
Not Setting Up an Emergency Fund?
Many people find themselves in financial trouble if they do not have an emergency fund to fall back on should the need arise.
If you get laid-off of a job or have a medical emergency that prevents you from working for a time, having an emergency fund to rely on will save you from financial heartache.
Solution: Determine how much you can afford and then contribute the largest amount you can. Making a small contribution is more reasonable than not at all.
Not Taking Advantage of Employer Sponsered 401(k)
People are living longer than ever before and with uncertainties over Social Security, inflation, etc., supplementing a retirement fund is more important than ever.
Studies suggest that many people are not contributing to an employer-sponsored 401(k) which is like throwing money away free money.
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Comments
Great suggestions and definately agree with an emergency fund.
Another great hub Darlene!...and yes you're right about conniving sales people, many don't care about your needs at all they just want a fat commi$$ion off ya. However, there are a few genuine sales people in the profession who really want to assist you in helping people act in their own best interest. But sadly many are just fast talking money snakes! Shoppers have to use their best judgement as to whether they think a saleperson is just trying to take their money -- or are they genuinely trying to provide useful consultative infomation to help you make the best informed decision.
Jerilee Wei says:
16 months ago
Very good points!