Have you ever wondered how your one friend makes all the right money moves? Well, they avoid the most common money mistakes, that’s how!
Here are the top 10 money mistakes people make and how to avoid them so you can also make smart money moves!
How are you going to make smart money moves without a budget? You’re not, we can tell you that! Without a budget, it’s easy to overspend on things you don’t need or can’t afford, leading to a cycle of bad spending habits.
We are particularly vulnerable in how we spend our money, because we often have less income, partially due to income inequality. Being smart with our dollars can also work to empower our community when we are conscious of where our dollars are spent! You may have already taken the first step to #BankBlack, channeling our dollars back into the community!
Check out our best practices on creating a budget and cross “creating a budget” off your to-do list today!
Big mistake! There will be rainy days ahead, and it’s super important to have a store of funds prepared.
Unexpected expenses, such as medical bills or car repairs, can increase our chance of debt accumulation. We recommend having at least three to six months of expenses saved up in an emergency fund.
Open a BankBlack Savings account today and set up the automatic savings plan to help you automate your rainy day savings!
Like a budget, a plan is your best friend! Using credit cards excessively without having a plan in place to pay them off can result in high-interest rates and a growing amount of debt.
Try not to spend over 30% of your total credit available. Why? Well, your credit score can drop faster the more your debt continues to rise when you cross the 30% threshold.
The game of saving is no joke! The earlier you start, the better off you are for long-term financial stability. Many people fail to prioritize retirement savings, leading to financial insecurity in their later years.
Our rule of thumb: Save early and save often!
No accounting expertise is required! Simply spend less than you earn. Many people are distracted from building wealth by keeping up with the Joneses.
Smart financial decisions deem prioritizing your savings and your investments to build wealth instead of accumulating material possessions.
This number is one of the most powerful numbers in your life! Your credit score impacts your ability to obtain loans, credit cards, and other financial resources.
Regularly monitoring your credit score is crucial so you can address any issues. Make it a goal to check your score once a month!
When making financial decisions, ask yourself if this is a want or a need! Taking out loans for luxury items or vacations will come back later to bite.
If the price tag isn’t within your current means, save towards it instead.
Ask yourself if you really need that extra streaming service or fancy gym membership. Are you really getting your money’s worth?
Assess your recurring payments and ask yourself if you have used them recently. If not, it might be time to cancel them and rethink how you can better use those funds.
Many people don’t seek out financial education or advice, leading to poor financial decision-making.
Our Financial Education Center makes topics like “Financial Foundations” to “How to Invest in Your Future” easy. Level up and start your learning today!
Failing to track expenses can result in overspending and makes it harder to stick to your budget.
Get perspective quickly! Use our Money Management tool to get a snapshot of your spending habits and track expenses.
Now that you know the 10 mistakes to avoid, we suggest heading over to the 9 ways to make money moves! Combine these tools for long-term financial success…and maybe you can teach your friend a thing or two!
