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Don't Throw Good Money After Bad |
By:
Barry Waxller |
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Don't Throw Good Money After Bad
Barry Waxller
Study after study has revealed that we all make mistakes with our money. These mistakes, of course, end up costing us big time. Here are some of the basic mistakes that most often occur. Make sure to avoid them or end them now.
The biggest mistake nearly all of us make with money is one of timing. Simply put, we don't take action today and then come to regret it. When should you start saving for retirement and a new home? Now!
I was never a huge fan of math, but there is a simple formula even I can follow when it comes to finances. That formula is do not spend more than you take in. It sounds simple, but studies show a majority of us spend excessively.
If you spend excessively, you'll end up living on credit. This is another huge mistake. Credit comes with interest rates, high interest rates. You are never going to get a good deal living on credit. Eliminate your credit debt and live on what you have.
I do it. You do it. We all do it. Impulse purchases. There is an entire niche to marketing that is devoted to getting us to buy on impulse. Don't fall for it. It is almost always a poor use of your money. Resist!
Credit cards are evil. Let me say that again. Credit cards are evil. Cut yours up. Any good financial plan stars with this step. Keep one if you must for emergencies, but cut them up otherwise. Use your debit card for convenience and to keep your spending under control.
Saving for retirement is critical. Don't make the mistake of waiting to long or not saving enough. Most retirement predictions these days are wrong. Medical care is improving yearly. You might live to 100, so make sure you have the money to do that.
Avoid the ravings of the latest financial gurus. Most of the gurus are only good at selling themselves. A year ago, they all said the real estate bubble would never burst. It did. Now they are saying it will be a long time before it bounces back. Wrong again!
Don't go along with the Jones. Take into account your lifestyle and plan your finances accordingly. Just because the neighbors are spending money right and left does not mean you need to. Having money in the bank prevents sleepless nights.
We all need a little breathing room every so often. They way to do this financially is to figure out your total yearly expenses. Now save up that amount and put it in some safe investment. You now have security for a year regardless of what happens.
If you read back over the proceeding paragraphs, you will note two common themes. First, live within your means. Second, use common sense when considering investments. Stick to these two themes and you'll be in good shape.
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Article Source: http://www.statssheet.com/articles/article78569.html |
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