1. Not planning for emergencies
One of the biggest money mistakes people make is being unprepared for emergencies. At some point in your life, there’s a chance you will need more funds than you have available, due to a job loss, an illness, a major repair, or some other crisis. Unless you diligently save and keep a “nest egg,” you may find that being financially unprepared is the biggest mistake you ever made. And depending on the emergency, it could be devastating.
2. Not saving for retirement
Many people don’t want to work once they reach a certain age, and if you live long enough, you’re eventually be unable to work due to age or illness. If you haven’t been saving adequately for retirement, you may be in for a rude awakening sometime in your future. If you haven’t begun saving yet, start as soon as possible, and learn the ins and outs of 401(k) and IRA investing. Your future self will thank you.
3. Buying a new car instead of a used car
When it’s time to go car shopping, it’s tempting to buy a new vehicle, but you can save a lot of money by buying a used car. It’s not hard to find used vehicles in tip-top condition with low mileage, and many still have manufacturer’s warranties in effect. You could be purchasing a vehicle that is almost like new while saving a bundle.
4. Forgetting about auto-pay subscriptions
Beware of auto-pay! It’s a convenient feature that you likely use for a number of bills and services. It’s nice to avoid the worry about getting a payment out on time or possible late fees, but just how many services are deducting money from your bank account on a monthly basis? When was the last time you took stock of all your recurring monthly expenses? Letting it all run on indefinitely without thinking about what you really use or need is a big mistake.
5. Not taking advantage of second-hand
Used cars are one thing, but you can buy a lot of other things second-hand and save money. This could be anything from tools to clothing to golf clubs. Gently used items are frequently donated to Goodwill© and similar places, sold at flea markets and yard sales, sold to second-hand stores, or pawned. Don’t ignore these types of places because they’re full of great deals, and you never know what you’re going to find that can save you some serious dough.
6. Not having a budget
If you want to effectively manage your money, you have to have a budget. It’s that simple. Add up all your expenses and all your income, and figure out how much you want to put aside for savings each month. Develop a budget that works for you, but is realistic, and make it a point to stick to it. Review it periodically and make adjustments as necessary when your circumstances change.
7. Not planning your estate
Estate planning is important for your family’s financial well-being. Nobody likes to think about what happens after they’re gone or if they become incapacitated, but ignoring the inevitable is irresponsible. Take some time to get your will in order, and ask your banker if a trust or other estate planning vehicle would be a good idea for you.
8. Not clipping coupons
On a week-to-week basis, you can save some cash by clipping coupons. And that means in the traditional sense (cutting coupons out of sales papers), but also in today’s technologically advanced world. Look for apps and websites where you can get deals on your shopping needs, whether it be services like Groupon© or your grocery store’s mobile app, or both. It never hurts to find discounts before you go on a shopping trip, and a little here and a little there adds up.
9. Not utilizing a health savings account
Another common money mistake is not utilizing a health savings account. This is a medical savings account for those with high-deductible health plans. A health savings account is tax-advantageous because funds contributed are not subject to federal income tax at the time of deposit. When funds aren’t spent, they roll over year-to-year, and accumulate, give you a safety cushion in case of a major medical expense.
10. Not having life insurance
Much like a lack of estate planning, not having life insurance can be devastating to your loved ones. It may seem cumbersome to spend money every month on something that will only pay off when you’ve passed on, but many plans are very affordable and can make a world of difference to your family’s well-being.
Avoid these money mistakes and plan for a future that includes financial security for you and your family.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.
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