Life is full of ups and downs, but the financial roller coaster can be one of the most stressful. This blog post will provide you with some tips for avoiding money-making pitfalls so that you can keep your finances on an even keel.
It’s a sad truth that money is a big part of your life. Whether you make it or spend it, everyone has something to say about the green stuff. The only question is: are you spending too much? In this article, we will discuss some common pitfalls people have when handling their finances and how to avoid them.
#1: Manage your spending and expenses carefully
The first step to avoiding many financial pitfalls is simply to manage your spending and expenses carefully. That means keeping careful track of what you spend money on, and where you spend it. It can be helpful to get a clear picture of where most of your money goes each month. You may find that certain categories such as entertainment or clothing are draining more than they should, so try delegating some money from those categories in order to put them towards other things like savings or paying down debt.
#2: Don’t be afraid to negotiate
Don’t be afraid to negotiate, especially if you are buying big-ticket items, such as electronics or appliances. Many retailers have price-matching policies for their competition, which means they are willing to meet the prices of other local retailers. So if there’s a TV you want to buy at one store but it’s $100 cheaper at another store across town, don’t be shy about calling up the first store and asking them to match the price.
When buying new things, negotiating for a lower price is often the way to go. However, people sometimes get apprehensive about trying it because they don’t want to be seen as rude or selfish. Remember that it’s the salesperson who makes money when you buy something, so if you can save some money by putting in just a little bit of effort, why not do it?
#3: Always have an emergency fund on hand, just in case something unexpected happens
Always have an emergency fund on hand, just in case something unexpected happens. By having a few months worth of savings set aside – and by knowing where that money is, so it’s readily available if you need to access it quickly – you can avoid many problems associated with not having enough cash around. If your car breaks down, for example, this fund will be there to help pay for the repair without putting you further into debt or having to borrow from family members.
#4: Don’t invest in anything you don’t know about
When it comes to investing, you need to do your homework. That means knowing about the stock market, potential earnings of companies whose stock you are considering buying or selling, and anything else that might affect your decision. Don’t invest in anything you don’t understand, since that’s an indication that it is not a good investment for you. If you don’t understand what a company does or why its stock price is increasing, then that’s a bad investment.
Think about investing or managing your money like a game. You should educate yourself and know the lingo before you start playing! Start with sites like this forum for Empire27 where people are always willing to answer any of your questions on investments, earnings potentials, and more!
#5: Buying things on sale is nice, but avoid spending more money than you need to
Buying things on sale is nice, but avoid spending more money than you need to in order to “save” money. If your income doesn’t allow it and you can’t make ends meet after paying for necessities like rent and utilities, then don’t buy groceries just because they’re on sale. Some people use this type of rationale to justify buying items that they really can’t afford and that will put them further into debt. The same goes for using coupons: only use them when it makes sense financially and won’t
#6: Make sure to save for retirement
Saving for retirement is another important thing to avoid money-making pitfalls. Not doing so can mean financial trouble down the line – especially if you miss out on valuable compound interest! And if your employer offers matching funds for your 401(k), always contribute at least enough to get the maximum match because that’s free money just waiting for you.
#7 – Avoid high-interest debt
Make sure to stay away from high-interest debt such as credit card balances and payday loans. The interest rates on these types of debts are really high, so they should only be used for emergencies when you know you can pay them off at the end of the month.
Don’t buy things if paying them off will require you to charge more on your credit cards! If you don’t have enough in savings to cover an emergency expense, but need that item immediately, borrow the money from a family member or friend rather than spending it via high-interest debt with a bank.
#8 – Never lose your job if it’s your only source of income
Never lose your job if it’s your only source of income, such as for a family with young children. If you do find yourself unemployed and needing cash flow right away, there are some options available to you: unemployment benefits, direct deposit advances from your credit card company (or another payday loan), and more.
If you can, keep your job as long as possible to have a stable source of income.
#9 – Avoid one-time fees whenever possible
Avoid one-time fees wherever possible; those can really add up. Paying $99 for the latest video game system may seem like a good idea now, but that also means paying an extra $70 per year in service fees. That amounts to over $800 every ten years – ouch!
You’re better off buying used older models of video game systems and games, or renting them from a company like GameFly instead. Many products can be bought used for steep discounts, so think about buying them second-hand whenever possible. If you do opt to buy new products, read the contract before making your final purchase decision – that way you’ll avoid surprise fees and charges.
#10: Don’t borrow money unless absolutely necessary
It’s important to remember that borrowing money isn’t always bad; however, it should only be done if absolutely necessary. For example, borrowing money to start a business would definitely be worth it in the end if it becomes successful but make sure you know how much money is required and what the interest rate is.
It’s not too late to change your habits and become a better money manager. Start by avoiding these 10 common pitfalls that we all run into from time-to-time!
I hope that you’ve found this article to be informative and helpful in avoiding these mistakes.