This guest post was written by the experts at NerdWallet.com, a consumer finance website committed to helping you save money.
Without realizing it, many people make common money mistakes. You can watch your finances like a hawk, and you still may not be able to see why some of your money has gone down the drain and disappeared. If you’re having trouble figuring out what’s causing your money to disappear, it’s time to take a critical look at your spending habits. Here are some common money mistakes that may be holding you back.
Skipping out on health insurance
Skipping out on health insurance may seem like a good idea to save money at first, but it can and will most likely backfire on you. Getting the right insurance plan can save you money and save your health, too. If unexpected accidents or health problems show up, insurance will be cheaper than paying out of pocket. You can save money by shopping around for the right plan, or see what your employer has to offer. You should also make sure your plan information is up-to-date. Having out-of-date coverage creates the possibility of you paying way too much, or worse, not having the coverage you need.
Paying too many fees
Fees are everywhere, and if you’re not careful, they can really hinder your finances. Always check for them when you’re using a credit card. The only way to truly avoid fees is to plan ahead. If you’re going somewhere that only takes cash and you need to withdraw money from your checking account, make sure you go to an ATM in your network to withdraw the money you need beforehand. Keep a close eye on your accounts to make sure you have enough money to complete your transactions and pay your bills on time. It’s also good to keep money in a savings account for a rainy day.
Not planning for retirement
A lot of people hold off on saving for retirement. They may think it’s too far away to worry about, or they assume they can live comfortably off a company pension or Social Security. The average Social Security payment is $11,000 a year, and for a household of one, that’s already a hundred dollars below the poverty line. To make matters worse, many people who have a company pension and social security still need extra money to live comfortably. Make it easy on your future self by opening an investment account, usually an Individual Retirement Arrangement (IRA) or a 401(k). 401(k)s have a high yearly contribution limit, while IRAs are eligible for lower taxes. If your employer offers a 401(k), take it, especially if you can get matching funds.
Ignoring the total cost
Many purchases, especially the expensive ones, have little costs that can easily slip by unnoticed. Think about how much money you spend on your car every month. Most people factor gas, insurance and loan payments into the total cost of owning a car, but what about registration, parking or maintenance? You can offset some of these costs by including them in the next version of your budget, but you should also be realistic and realize that you can’t possibly account for every tiny expense. Leave wiggle room in your budget in case something breaks, or you have to spend more than you expect.
With 2013 underway, now is a great time to review your personal finance records from 2012 and set goals you want to accomplish for 2013. What are your financial, business or life priorities? Specify those goals and then use saving or budgeting methods to reach said goals. Look at where you exceeded or fell short of your 2012 goals, what worked and what didn’t and use that information in meeting your goals for 2013.
Once you’ve come up with your goals, write them down and rank them in order of importance and urgency. You may need to deal with the urgent goals first such as paying off a loan, then work on the importants ones, like saving for retirement. Regularly review your progress, but don’t obsess over these goals as sometimes you may fall short. Once you have defined your goals, it’s time for you to make a plan on accomplishing them.
What are your 2013 goals?
As a youngster, I never really thought about saving for my retirement. All I ever thought about was the fastest and best way I could spend any money that I had. I’m sure I’m not alone in that sentiment either. Like I used to, you may be thinking it’s not that big of a deal to save for retirement and say “I can always start when you get older.” The truth is, however, the sooner you can start, the better off you will be in the long run.
It’s hard to argue against the facts, too. CNNMoney says that if you start investing $3,000 a year for ten years when you are 25 years old (without investing a dime after ten years), your $30,000 investment will have grown to more than $472,000 by the time you are 65. In contrast, if you start saving $3,000 a year for 30 years at age 35, that money will have only grown to $367,000 – a difference of over $100,000.
So start saving now. I promise it will be one of the best things you have ever done for yourself! If you’re not sure how to start saving or you may be having trouble with debt, don’t be afraid to ask us questions or talk to an expert. We would be glad to help you get on the right path financially!
Check ya later!
With colder weather arriving in Georgia, it’s time to get out your warm clothes. Go through your closets, boxes and drawers and get rid of clothes you no longer wear. With all of the items you gather, you can donate them or even sell them for some extra pocket cash. Have you gone through your drawers or closet lately? If so, what’d you do with the stuff you no longer use?
I’m sure you have all heard the phrase, “Expect the unexpected.” In financial terms, this means to prepare for any emergencies and the best way to do that is by creating an emergency fund. Emergency funds are important because they are available to help keep you out of financial hardships such as the loss of a job, unexpected medical costs, or car or home repairs. An ideal emergency fund should consist of three to six months of worth of living expenses. Begin by creating a separate savings account specifically for your emergency funds. If you’re already struggling financially, start small with your contributions toward your emergency fund, but make them regularly. Once you get in the habit of saving, it will become second nature. To find out more savings tips or to get started with a savings account from Georgia’s Own, click here.
Most of us all have smartphones today and if you’re stuck with the dreaded flip-phone, you’re no longer considered “hip” by many (although my dad still has one and it still works like a champ). Smartphones can do everything and we are glued them, but there is one major problem with them – they are so expensive! Here are a few ways you can shrink your bill:
1. You may not need the “unlimited data plan”. Pay only for what you use. Try to limit the minutes you use talking on the phone with your plan and instead send a quick text or email. Most people you talk with probably have the same phone as you and those texts are usually free. iMessage for iPhone and G-Chat from Google are great tools to use for free messaging.
2. Monitor Usage. Track your actual usage and then determine a plan that works best. You just might be able to make a switch to a cheaper plan.
3. Utilize Wi-Fi. Whenever possible, connect to wi-Fi as it doesn’t use your data plan. This will allow you to search the web and stream videos and music at minimal costs. Also, only try to do your gaming and streaming while connected to wi-Fi.
How much do you spend monthly on cell phone bills? Do you know of other ways to lower your bill?
Tailgate on the cheap this football season. If you decide to setup a tailgate for a game this year, remember that it is in fact a game and not some fancy party. Try some of these tips to ensure you have a enjoyable yet affordable tailgate:
1. Instead of buying the $15/pound steaks, buy the $4/pound ones and buy more of them. It’s more likely that your company will care more about the quantity than about the quality.
2. Tailgate with a group. Divide up the menu and have everyone bring a specific food or beverage for the day. Save money on parking too by riding together.
3. Park wisely. Instead of trying to get right next to the stadium, you can save some money by parking a little further away. You may be walking further, but the plus is you don’t have to fight as much traffic when leaving and you can get little exercise in to work off all of that delicious food.
4. Avoid novelty items. Napkins and plates with logos may look awesome, but stick to the generic team color stuff from the local grocery store.
What do you do to save at your tailgate?
If your cell phone gets soaked with liquid, don’t panic. You may have a chance to save it if you act quickly. First, don’t try to operate it. Remove the battery, SIM card or memory card and thoroughly dry them. Then place the parts in a bag of rice for 24-72 hours to allow the rice to absorb the leftover moisture. If that doesn’t work, be careful when filing a warranty claim as some phones have water indicators.
Do you know any tricks to save a phone after it has been soaked?
Be aware of online fraud and phishing. When checking email or surfing the web, don’t get hooked by phishing scams. Online thieves are looking for Social Security, checking account, and credit card numbers, PINS and more. If you get a pop-up or email asking for personal information, don’t reply or select a link. Also never send sensitive information such as account numbers over email.