4 Money Mistakes & How To Avoid Them
When it comes to managing money, we all know what we should do and what we shouldn't do! However sometimes we make mistakes, and sometimes those mistakes have a cost to them. Listed below are some common money mistakes that can cost you big!
Paying Your Bills Late: A lot of people make the mistake of paying a bill or bills late, not because they don't have the money, they just forget, time gets the better of them. This mistake can have steep costs, late fees, penalties, etc... The worst part is it is completely avoidable. The easy fix to this is set reminders on your computer, cell phone or calendar, or set up automatic bill-pay when available. Did you know that if you pay your credit card or other bills late consistently, they will raise your interest rates and then can raise any credit based service fees!
Bounce a Check: Never write a check that will bounce or try to float a check! Never write a check for an amount of money that you know you don’t have in your bank account. This is common sense. The average return check fees are $35.00 per transaction. So for example, you have a $100.00 in your account. You have 2, $25 debit transactions, and $100 checks written. If that check hits first, your account now goes to 0 and when those debit transactions go through, you're in the hole for around $120.00. Those 2 bounced transactions cost you $70.00. How to avoid this: 1. Don't write checks for more than you have in your account. 2. Sign up for overdraft protection. If you do withdraw more money than you have in your account, the overdraft amount will be automatically added to your credit card or taken from your savings account.
Credit Card Balances: This all too common mistake affects a majority of the population. Many people believe that carrying a balance on your credit card is good for your credit. The truth is, carrying a balance not only doesn’t improve your credit score, but in some cases, it could lower it. The best way to manage your credit cards is to pay off your balance in full each month, if you can. If you can’t, be sure to pay more than the minimum so that you’re not paying outrageous interest fees. How to avoid this... STOP USING CREDIT CARDS!
Not SAVING: It’s extremely important to have an emergency fund ready to go when you need it. I’m not saying you should have thousands and thousands of dollars. Life happens and sometimes, saving that much just isn’t possible. But putting away just a small amount each month could add up to more than $1,000 over the course of the year. And in the event of an emergency, you’ll be happy you have it.