What Are Some Common Bad Money Mistakes?

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Everyone has some bad habits. When those bad habits include the handling of your money you can find yourself in a financial disaster.

It’s very easy to overspend if you don’t think about where your money is going.

If you regularly go shopping and make impulse purchases you can spend a lot of money very easily. If you purchase something because it is on sale and pay for it with a charge card you will not be saving any money unless that purchase is paid off before any interest is added to the purchase price.

Before you make a purchase think about whether you really need or truly want the item. Sometimes it you wait a day or two before making a purchase you’ll find you didn’t really want the item after all.

Not having a budget or spending plan is a bad money mistake. You need to know how much net income you receive, how much is allocated to fixed expenses, and how much is available for discretionary spending

Not saving any money is a bad money mistake. No matter how small the amount,you should put something aside from any money that you receive. You need to have an emergency fund so you don’t always need to resort to charging unexpected expenses.

Not taking advantage of retirements accounts such as 401K plans offered by an employer is a bad money mistake. Although as a young person you may think retirement is far in the future you’ll be surprised how fast the years fly by. You don’t want to face retirement years with little or no money put aside.

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Carrying balances on credit cards is a bad money mistake. You are wasting your money paying interest for things you purchase that you probably don’t need or even worse for cash advances you may have taken on these cards.

Using your credit cards to fund a lifestyle you cannot really afford is a major bad money mistake. You need to rein in your spending so you learn to live below the income you generate each month.

Eating out frequently or going through the fast food drive thru because you don’t feel like cooking is a bad money mistake. Cook several simple meals to have on hand so you can eat at home most of the time and plug that money hole.

A $5 cup of coffee a day is a money mistake. If you purchase just one $5 coffee each workday that equals $25each week. Is a cup of coffee really worth it? Can’t you have your expensive coffee once in a while as a treat instead of every day.

Other bad money mistakes include spending money to fund drinking, smoking, gambling or drug habits. These can take a big bite from your discretionary income. If you have extra disposable income available there is nothing wrong with a few drinks or a little gambling now and then. They should not be a major aspect of your activities. Do you really think purchasing lottery tickets every day is going to make you rich?

It will not be easy and will take some practice, but you can learn to get rid of your bad money mistake habits. It may work better for you if you tackle changing one bad habit at a time for a new habit that is better for your financial health.