Here are 5 money mistakes that you may be making.
Gen Y Finances: 2017 could be most successful year in your life!
1. Going without an emergency fund.
Do you have an emergency fund? These are very important! Some like to just charge any emergencies onto their credit card, but I prefer for there to be an actual emergency fund instead of just relying on credit cards. It makes everything so much easier if you have one.
Emergency funds can cover:
- Total job loss.
- Slow months where you don’t make as much money.
- House repairs, such as if your furnace breaks or if your basement floods.
- Car repairs.
- And more!
2. Not having a budget.
I have met so many people who have never had a budget, and they don’t even know where to start. I feel like this should be something that is taught when children are in school so that they are more prepared for the real world.
When you do make your budget, make sure that it is realistic of the actual money that you make and the actual money that you spend each month.
3. Spending more than you make.
There is no need for you to keep up with the Joneses. You should only spend money that you have, plus still be saving money as well. You should analyze the actual money that is leaving your accounts each month, and add it up to the exact penny. Is this amount less than you make each month? It should be!
If you are spending more than you make each month, then you need to work on lowering your expenses. You might need to cut out things or at least lower the amount that you spend on certain categories.
4. Racking up credit card debt.
How much credit card debt do you have? The average person has a decent amount of credit card debt, but that does not mean that you should as well. Your credit card is not another form of income, you should be using credit cards to your advantage, not against you.
Learn how to gain rewards, leverage the additional cash flow and so on so that credit cards can be on your side.
5. Not caring about your credit score.
No matter what you think, your credit score can be important in many situations. Having a good credit score can mean that you will get approved for certain things (such as a home) and even earn a lower interest rate so that you can pay less.
Having an interest rate of just 1% or 2% less on your mortgage can mean a savings of hundreds of dollars each month.
What money mistakes have you made?