Managing money is challenging, but you can improve your finances by avoiding these money mistakes.
Managing money isn’t easy. There are so many things tempting us to spend. Whether it’s adorable baby clothes, trendy shoes or a new flat screen, sometimes the urge to splurge is overwhelming. If you aren’t reaching your financial goals or drowning in credit debt, it’s time to take control and stop making money mistakes. Here are some things you should avoid doing with your money to get your finances in better shape.
Don’t cash your paycheck.
Many employers give employees the option between receiving their paycheck directly or signing up for direct deposit. Sign up for direct deposit if possible. There are multiple benefits to using direct deposit:
- You won’t see the cash right away and spend it quickly.
- Your funds will be in your account, so you will have cash to cover expenses.
- You can divide where the funds go, so you can send some directly to your 401(k) or savings account.
If your employer doesn’t offer direct deposit, you can still manually divide your funds. Cash your check and deposit some funds in your checking account and a designated amount into savings for the future.
Don’t let financing offers trick you into buying.
Do not make impulse purchases based on the availability of financing. It can take a long time to save up for big ticket items, especially when you are living on a tight budget. Retailers know this, and that is why they partner with companies to offer consumers finance deals. These deals allow consumers to buy items now and repay them over a period of time with monthly installments. It’s important to read the fine print. Some of these finance deals will offer 0% interest for a certain period of time, then charge high interest after that time has expired. Others will increase the monthly rate to include interest that wasn’t paid during the initial period. If you do decide to take advantage of financing through a retailer, be sure to read the fine print, and make sure the terms make sense for you.
Don’t spend all your money instead of investing it.
You have probably heard the phrase, “the rich get richer, and the poor get poorer” but you might not know what it means. A recent study has supported the idea that the rich really do get richer, and it is in large part because they get higher returns on their investments. The more money you invest or put into money market accounts, the more money your money makes you. The rich can invest more, which increases their wealth. By putting money aside for high-yield savings accounts or investments, the more money your money will earn you.
Don’t co-sign loans you can’t pay.
Co-signing on a loan you can’t afford could ruin you financially. It can be hard to turn down a request to co-sign on a loan, especially when it comes from a child or close family member, but co-signing means being accountable for repayment should the borrower fail to make payments. Not only will you be responsible for repaying the loan amount and any interest, but late or missed payments could damage your credit score and ability to borrow in the future.
Managing money can be tricky, but you can avoid common money mistakes. Always be intentional with your money. A budget will help you ensure that your money has a purpose. Create a savings account and put away funds for investments so that your funds can earn you more.
If you need funds to cover major expenses or consolidate debt to pay it off faster, a personal loan can help. At Uprova.com, we help borrowers find the right funding for them. Learn more about our loans today.