August 16, 2016
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Most people cite financial security as one of their top priorities in life. Everyone wants enough money to pay for their house, to save up for their children's college funds, and to create a comfortable retirement fund. Although there is no one-size fits all plan for creating financial security, there are a few things you can avoid to better your financial future. You can try one or all these tips to get a smart start in protecting your money right now
- Impulse spending. There is nothing wrong with the occasional indulgence, but making a habit out of it can be problematic, especially if you pay for such purchases with credit. Frequent impulse purchases not only drain your bank and savings accounts faster, but you often end up with a lot of junk you'll later regret buying. Try to limit your impulse spending purchases and keep a limited amount of cash on hand when making impulse purchases.
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- Neglecting to create a budget. It's imperative to know where your money is coming from and where it's going. If you don't already have a budget or plan, it's time to start one now. A solid budget will help you see where you spend most of your money and where you can potentially cut expenses. If you want to see how much money you can start saving, you need to figure out your budget. There are many apps and software programs that can help you create and manage a budget. One notable service is Mint, a web-based service makes it easy to create budgets and set up alerts if there are any unusual charges. It's also free to sign up.
Source: U.S. News, Money
- Living beyond your means. You should never spend more money than you make and you should never take out more credit than you can pay back. If you want more spending money or would like to upgrade your lifestyle, there are many ways you can create additional income. You can sell items you don't need or want anymore through consignment shops or eBay. You can moonlight during evenings and weekends as an Uber or Lyft driver. If you're short on time, you can take online surveys or sign up to become a mystery shopper.
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Source: Go Banking Rates
- Frequently overdrafting your bank account. Banks love the overdraft services they provide customers because they charge a high flat rate (usually $30 or more) for every overdrafted payment. Not only are you require to put more money back into your bank account, but you also have to pay the bank's extra fees. You can prevent overdrafts from happening in the first place by first monitoring your bank balance at least once a month.. If your bank or credit union offers overdraft protection, don't sign up for it. This however doesn't always work if you signed up for automatic payments. If you have any recurring or pre-authorized payments on your debit card, always try to keep a cushion of at least $100 in the bank ($300 or more for larger payments) to provide added protection.
Source: Huffington Post
- Missing credit card payments. It's never a good idea to miss a monthly credit card payment. Don't let yourself get caught in a downward spiral by missing consecutive monthly credit payments, use for your card wisely by making small purchases with it every month and then paying it off in time. Credit card debt is a common financial issue for many people, but it doesn't have to be if you know how to use credit the right way.
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Source: Credit Blog
- Not saving money. If you have extra money in your hands, it may be tempting to use it to buy a new car, television set, or vacation. But your best bet would be to save money for the future. You can start out small by saving loose change like quarters and nickels. If you can, try to allocate $250 to $450 a month for a bank saving account. There are many small ways to save extra money that really add up. You can dine out less, bring a packed lunch to work, or buy only used clothes and furniture. Ideally, you will save enough money for three separate accounts: emergencies, retirement, and college.
Sometimes it's the smallest changes that make the biggest impact. Change at least one bad financial habit today and you will reap the rewards in the upcoming months and years.