Let’s keep this Personal Financial Makeover going!
It is New Year’s Eve and maybe we should look at some of the biggest money mistakes to avoid as 2019 rolls in.
Of course these are applicable anytime of the year and are in no particular orde.
Most People Have Made Money Mistakes
There are not too many people that have not made some money mistakes. Maybe it was a bad investment. Maybe it was an impulse purchase.
My own may be tied to my love of cars. I grew up loving vehicles. My dad and I would go and look at new cars on Sundays. And our society seems to be car crazy. It is a status thing.
So instead of getting a car, paying it off and then driving it for a few more years I was always thinking about trading in. Now I do not remember actually doing it but the whole mindset is wrong.
A vehicle is just a terrible purchase. They may be an “evil necessity” for a lot of us and yes, MAYBE if you can save the cash and just buy a used car outright you may lessen some of the ” money mistake” aspect of it all.
Anyway that is my big one.
Here are more of the biggest money mistakes to avoid in 2019.
Money mistake #1: Paying too much for cell phone service
Here in Canada a lot of us think we get screwed when it comes to cell plans.
So being able to find the lowest cell phone plan may be a bit dependent on where you live.
If you’re forking over in excess of $60 a month for a cell phone plan, you’re probably overpaying. Xfinity Mobile runs on Verizon’s strong and reliable network, but it’s Xfinity’s more than 18 million Wi-Fi hotspots nationwide that can help subscribers cut costs by only paying for the data they use.
Money mistake #2: Still paying for cable
Many people who scrutinize their cable bills have found that subscribing to a streaming service is far cheaper. They have successfully cut the cord but still enjoy watching tons of movies and their favorite TV shows every month.
Money Mistake #3: Buying A Car At The Wrong Time
As I mentioned above I am a “car guy”. People come to me for car buying advice. But I have made mistakes when it comes to buying a car.
I’ve seen numerous debates about buying used compared to new cars. Should I buy or lease a car? Etc.
In all honesty, it’s your choice what to do here. We all know about depreciation and how fast new cars lose right off the lot, but we also know used cars can quickly become headaches too.
You really need to dig deep and check your ego at the door on this one. Driving a used vehicle that is still in good mechanical shape for a few more years is the better idea. Oh you want a car? Make the payments to yourself for a year to see how it feels.
Money Mistake #4: Payment More For Accommodations Than you Can Afford
It does not matter if you are getting your first apartment or buying a house, do not make the money mistake of buying or renting more than you can afford. No, you do not want to live in a dump or in an unsafe area. I get that. You must realize that banks will probably qualify you for more than you can really afford. And it is oh so easy to level up when it comes to buying a house. This will be the biggest purchase of your life and so many people are house poor. Plus interest rates are probably going up so keep that in mind in 2019.
Money Mistake #5: Not Making It A Habit To Pay Yourself First
It is rather shocking how few people have money in the bank, or have money invested, or have an emergency fund. They feel that they do not have the money to save. Even if you just start out by putting 25$ away from each paycheck, paying yourself first is the best financial habit you can learn. Remember from this previous post that a huge number of people waste a lot of money every month on useless crap. Don’t make this financial blunder.
Money Mistake #6: Using a credit card to purchase a high price item
Credit cards are good for a few things:
- Helping you establish credit
- Emergency purchases
- Getting reward points or cash back
Having a credit card can be tempting for a lot of people, especially if you have a decent limit on your card.
But this is what gets people into serious financial trouble.
If you can’t afford what you are putting on your credit card, do not purchase that item. This is a money mistake pretty everyone has probably made at some point.
Money Mistake #7: Carrying A Credit Card Balance Every Month
Nearly half of Americans have been carrying a credit card balance for two or more years. And the average household with revolving credit card debt owes $6,081.
But not making payments in full and carrying a balance can add up, thanks to exorbitant, oftentimes double-digit interest rates.
Money Mistake #8: Not Living BELOW Your Means
Successful personal finance is actually quite simple. But that does not mean it is easy. Temptation to spend, spend, spend is everywhere. You are inundated with messages to keep buying stuff all the damn time. And having credit cards makes it oh-so-easy.
We like to appear like we have the best things and compare ourselves to what others have. Whether that is a car, a house, clothes, jewelry, whatever it may be.
Instead, don’t buy a house you can barely afford. Don’t purchase a car that you’ll struggle to pay. Ignore what others have and focus on you.
Spend less than you earn.
Money Mistake #8: Not Having a Household Budget and Spending/Saving Plan
A household budget is your road map of your personal finances. It shows you how much money you are earning each pay period or each month. And it shows where that money is going.
Writing it all down on paper makes it more real. You can catch overspending and see areas where you may be able to trim expenses.
If you are really struggling with paying your bills and managing your money then start with learning how to creating a family budget.
What are some of the biggest money mistakes you have made? What is your plan in 2019 to improve your personal finances?