What do you see when you look at your financial situation as a whole? Do you have concerns that you are making mistakes that will hold you back in the future? Are you willing to change your ways if it will put you in better position for financial success?
Here’s something to remember: everyone makes mistakes every now and again. No matter how hard you try to stay on track, you’ll eventually run into a financial error that stops you dead in your tracks.
Here are five financial errors that are incredibly common, but should be avoided as much as possible.
- Too Much Credit Card Debt
It’s easy to take on credit card debt, as all you have to do is pull out your plastic and make a purchase. It’s even easier now, with the number of online vendors like JUUL, Amazon, Jet.com, and many others, most of which will allow consumers to save their credit card information for more streamlined purchasing in the future. Unfortunately, all those small purchases have a way of adding up.
Get this: Fox Business notes that in the United States, the average household has roughly $16,000 in credit card debt.
If you’re carrying a credit card balance, look for a way to eliminate this as quickly as possible. Once your debt is gone, it will feel like the weight of the world has been lifted from your shoulders.
- Not Enough Retirement Savings
According to Forbes, nearly half of Americans are at risk of hitting retirement age with no savings to retire with. This is a problem on many levels, and sadly many people will not be able to retire when they want to.
If you don’t have enough money in retirement savings, now’s the time to take a hard look at your past mistakes and missteps. This is the only way to alter your plan and achieve more success in the future.
- No Emergency Savings
It’s easy to believe that nothing bad will ever happen to you, but that’s just not reality. You never know what the future could bring, and without an emergency savings, you could find yourself in a tough financial spot down the road.
According to CNN, the majority of Americans don’t have even $500 in savings. If you’re part of this group, do whatever it takes to stockpile some cash in an emergency account.
You may never use it, but it’s nice to know that the money is there if an emergency comes to light when you least expect it.
- Overspending on Dining Out
There are a lot of people who enjoy dining out; not only is it convenient, but it’s also quite a bit of fun. Unfortunately, dining out is also expensive. According to The Simple Dollar, the average person spends $232 per month on eating on-the-go.
Tip: keep track of how much you spend on dining out over the course of one month. Once you have this number in hand, you may realize you need to change your ways. It can be shocking to see just how much we spend on junk food!
- Spending Too Much Money on Rent
There is nothing wrong with wanting to spend money on a nice place to live; however, there does come a point when you could be overspending on rent.
Fewer people are renting in the majority of large cities in the United States. In other words, now may be the time to think about buying a home. This isn’t the right decision for everyone, but it could be a decision that allows you to save money and build equity over the long run.
No two people are exactly the same, meaning that the financial errors you have made in the past may not affect someone else in the same way. Even so, the five errors detailed above are extremely common. If you find yourself bogged down by one or more of these, you don’t have to continue down the same path in the months and years to come.
You can change your ways by learning more about credit repair, creating a budget, and making lifestyle adjustments as you see fit. It doesn’t matter if you are a retiree, a law school student searching for ways to fund your education, or a single parent, the more errors you avoid, the better you’ll feel about your finances.
What are your thoughts on these common financial errors? Do you have what it takes to avoid these in the future? What steps will you take to stay on track? Share your personal thoughts in the comment section below.