We may have our own specific talents, like being handy, athletic, or even funny, but managing money is in a class all by itself, and let’s face it, most of us are not good at managing money. After all, between paying bills, saving, not to mention staying out of debt, is quite a bit of responsible, so it’s no wonder that there are plenty of mistakes that we can avoid going forward in managing the finances so you can not only finish the year strong, but start out 2019 with a bang.
Throwing Money Away
Although having more money come in than go out is important, but it’s what you do with your hard-earned income. Between unnecessary spending and impulse purchases, you could see your funds dry up pretty quickly. A budget is a great way of allocating a certain amount of funds in a month for monthly bills, food, spending, and even saving. By cutting back on going out to eat and preparing meals at home, cutting the cable cord and opting for a streaming service, and even ditching the gym membership are great ways to quickly save hundreds of dollars per month.
Not Having a Cushion
Money is tight as it is, but what if a large unexpected expense comes up, such as an auto repair, vet bill, or even concert tickets you want to buy. While entertainment spending should not fall into an emergency fund, but you could have extra funds built up so you don’t have to put any expenses on a credit card that you had not planned for and avoid the risk of going into debt. By keeping a few months’ worth of expenses in an account, you can give yourself a nice financial cushion.
Putting Off Saving for Retirement
No matter if you are just out of college or have been in your career for a decade or two, retirement is still probably the furthest from your mind. Just because you may still be tens of years away from retiring doesn’t mean that you shouldn’t start preparing now. By setting aside money in a 401k or IRA account now, you’ll leave plenty of time to grow over time and set yourself up with a nest egg when you finally walk away from work. Check at work to make sure you’re taking advantage of all the employer-matching contributions they offer, otherwise you could be leaving free money on the table.
Handling the Finances Alone
The household finances can put quite a weight on your shoulders, especially if you are handling alone. Between paying bills, trying to stay out of debt, reducing expenses, and trying to save for the future, it’s a lot of responsibility. No matter if you live alone or with a family of four, it’s a good idea to keep a family member, significant other, or friend that you trust in the loop if you have any questions in the best practices for handling the finances. You can always hire a professional as well to ensure all mistakes are eliminated going forward.