Financial Mistakes To Learn From
Financial Mistakes To Learn From
In this day and age, there really shouldn't be any reason to make certain financial mistakes .
Do a search of the internet and you will find that there are thousands of articles out there that warn you of the pitfalls of certain choices .
Advice for living a financially stable life is everywhere .
What are you waiting for?
Here are the most common mistakes that I've seen people make .
I've even made a few of them myself .
These are the financial mistakes that you can learn from .
You've probably made a few of them yourself, they are very common.
Mistake #1: Using that little plastic card to get what you want.
We'll just start off with the number one mistake out there .
This is probably the most common mistake in the country .
Almost every person in the US today has a credit card .
It is almost like a right of passage when you turn eighteen .
There are even people out there that aren't eighteen yet that have them.
Credit card debt is the fastest way to ruin your finances .
It is easy to acquire and difficult to pay off .
The minimum balance doesn't pay off enough of your outstanding balance to help you very much .
You will be paying on your balances for decades .
Even a $500 balance can take you over a decade to pay off if you simply make the minimum payment.
Add in the interest rate, which rarely goes down .
If you miss a payment, you will really be paying the bank .
Thirty percent interest is common on a credit card once a payment has been missed .
And you only have to miss that payment by a day -- which can happen in the mail or processing if you don't plan ahead well enough.
Mistake #2: Buying more home than you can afford.
With the real estate market in the state it is today, many people are regretting their housing decisions .
Adjustable rate mortgages are acceptable loan products for some people .
But only if they can afford the maximum rate that the loan can hit if interest rates go up .
Too many people only consider that introductory rate .
They stretch and purchase as much as they can afford .
Then, when rates go up and their rate adjusts, they can't afford the payment .
Add that to a slowing housing market, and you may have a foreclosure on your hands.
If you are going to buy a home, make sure that you purchase what you can afford .
Take out a fixed-rate mortgage so that you know what your payments will be .
If rates go drastically down in the next couple of years, you can always refinance .
If rates go up, you are protected .
Try to aim for a 15-year mortgage over a 30-year .
It will save you hundreds of thousands in interest .
But if you can't do it, a 30-year fixed-rate mortgage is an acceptable loan choice for the purchase of a home.
Mistake #3: Not controlling your money.
Too many people live paycheck to paycheck .
They have no savings .
They have no retirement plan .
They have nothing to back them up in the case of an emergency .
They have no control over their money.
You have to take control of your finances if you want to retire someday .
You have to learn how to budget, save, invest and spend .
All it takes is a little time .
And once you get in the habit, you will notice that your life has more control .
You should say where your money goes, not lenders or creditors or anyone else.
Mistake #4: Not saving for retirement.
There are more seniors in the work place now than there were twenty years ago .
And even more than there were fifty years ago .
If you want to retire with enough money to live comfortably, you have to start putting something back today .
Start an IRA .
Contribute to your employer's 401(k) plan .
Figure out how much you need to invest and find a way to do it .
This is your future .
You don't want to reach sixty and realize that you can't afford to stop working .
There is no guarantee that you will be able to draw social security or other forms of assistance then .
What if you become ill and have to retire? What if you get hurt? Prepare for the future .
Start saving for retirement today.
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