Money Talks News: How to Avoid the Most Common Money Mistakes
Mon, 17 Feb 2014 14:04:18 GMT —
Whether it's overspending during the holidays, or putting some latest gadget on a high-interest credit card, everybody makes money mistakes.
But you really want to keep financial mistakes to a minimum. And I'm not talking about paying 5 dollars for a cup of coffee kind.
I'm talking about some really big mistakes. Here are some examples and ways you can avoid them.
Mistake number one: Paying 20% on a credit card when you're earning .2 on your savings.
Better idea: If your job is secure and you don't need the cash immediately, use low-interest savings to pay off that high interest debt.
Mistake number two: Buying stuff new when used would do.
Like paying 20 grand for a new car when you could have gotten a used one for 10. Save that money! Invest 10 grand for 10 years at 10 percent, and it will grow to $25,000.
Dumb move number 3? Not participating in your company's 401k or other retirement plan, especially if they offer matching money.
You should never turn down free money, or the tax deduction you'll get for contributing to your own retirement.
Another dumb move? Borrowing to buy things that go down in value. Borrowing for a house is one thing - it might go up in value.
But borrowing for clothes, cars or anything else that goes down in value? Not the path to riches.
And a final dumb idea: overspending to get rewards.
Sure it's tempting to try and rack up a bunch of frequent flier miles, but if you can't pay that credit card off every month, you shouldn't be trying.
Bottom line... We all make money mistakes, and there's nothing wrong with that, especially when we learn from them.
What you need now is more money mistakes and the solutions. They're waiting for you at moneytalksnews.com.
Just do a search for "money mistakes."
For Money Talks News, I'm Stacy Johnson.