Hey everyone, today we are going to be talking about what I think are the top 5 money management mistakes. The basis of this post comes from the constant evaluation that I have been doing of my spending in efforts to try and clean up my habits. I hope that you can pull something from this and in turn clean up or add to you already financial saviness.
1. Spending outside your range
This one is pretty simple but is something that I have been guilty of since I graduated college. Other people may call this keeping up with the Joneses. When I graduated I wanted to have everything cool that my friends had but unfortunately I didn't make as much money as they did. Obviously this dug me a pretty big hole that was very difficult to get of later in life. The big lesson here: Spend at least 10% less than what you earn.
2. Every new bonus or income stream doesn't equal "spend me funds"
This is something I have seen far to often while working in a tax office doing person income tax returns. Some folks would come in and get their refund and immediately be going to get their nails or hair done, buy new golf clubs, and one person even went to put some money down on a new car!!! I am guilty of this in that for a while I have been spending every dollar I earn rather than saving or using my side hustle rental properties to grow that business. Big lesson here: Save the windfalls, you will be thankful later on.
3. Buy and return - "buyers remorse"
I am so very bad at this and have done it so much in the past that I have a friend who gives me a hard time about it. He gives me a hard time because he thinks its so silly that I will buy things and then return them which he is so right, it is silly. While this isn't a super terrible thing to do, its not great either. It often causes me to spend money on shipping for items I never ever use, need, or wanted to begin with. Another term for this type of purchase is "impulse purchasing". The lesson here: Curb impulse spending - for me that means using cash.
4. Subscription Spending
This is such a huge downfall for me and maybe others so that's why I am going to put it here. I have found that it is super easy to sign up for subscription type stuff. This ranges from magazines, cable, razors, gym memberships, and even clothes. There are tons of other things people do on subscription. I mean you could include Netflix in here to. I am not saying subscriptions are bad but if you are like me it is good to reevaluate every now and again to make sure you are actually using them! This is probably going to save me a couple a hundred bucks a month now! Lesson: Monitor and stay updated on your subscription spending.
5. Ignoring the budget or your money plan
I am going to go out on a whim and say that we all probably have good intentions when it comes to money, I know I do. Every time I get started wanting to save and take care of my financial situation I honestly believe I can do it and that my budget makes sense. Unfortunately I have failed in this realm many times and a lot of the times its because I make unrealistic goals or decisions with how I will handle my funds. My big lesson: Make a budget that is sustainable to create happiness and SAVE!
There you have it, my 5 money management mistakes and SOLUTIONS! I hope that these can help you out as I know they are giving me something to look at as I go down this path.
What are some of your money mistakes? Have you corrected them or are you working to correct them? How?