5 Dangerous Financial Mistakes you may have made
If you’re over the age of 25 you probably understand the relationship between money and life’s comforts. Having a nice car and a 3-bedroom home comes with a certain price tag. Add that to the societal pressures that make us think we need things to prove our level of success, and you have the recipe for why many of Americas experience financial hardships. Here’s 5 financial mistakes I hope you haven’t already made.
You bought a house you can’t afford.
Buying a home to early is a mistake a lot of people make. Not factoring in the residual costs of having a mortgage is usually the pitfall. Those cost include HOA fees, utilities, maintenance & repairs. My advice, before you buy the home, make sure you can cover the mortgage twice with your monthly income.
YOU SHOULD NOT BE BUYING A HOME IF:
You have a lot of debt
You do not have plans to own to own it long enough to build sufficient equity
You have no idea how to manage your money,
You don’t make enough to support a house payment,
You don’t want to be responsible for maintenance/repairs.
2. You bought a brand-new car
This may be one of the first things you did when you started your first high paying job. A new car will depreciate (go down in value) by 60% in the first five years of its life. My tip buy older vehicles that is no longer losing value.
3. You bought a new pet
A new pet is a 10-15 year commitment from you to your pet that you will provide them with love and care for the duration. It costs anywhere between $1500 to $9000 per year to own a pet. My tip: if you don’t have your financial life in order, you do not need to bring another living thing into the equation (and those goes for babies true).
4. You are ignoring your debt
This can be the worst mistake you could ever make. Ignoring your debt is just going to make it worse. You may know the roundabout or ballpark number you have in debt, but you need to know the exact number.
YOU NEED TO KNOW:
What loans you have
How much they are
What provider they are through
What the interest rate is and
What the repayment terms are
Facing it head-on is going to be the fastest way to correct it. My tip: call each creditor and set up a payment plan that suits your budget but relieves the debt the quickest.
5. You are not on a budget
If you are not on a written budget, there’s a good chance that you’ve made every mistake on the list. You need to know how much you bring in and what you’re monthly bills are in a given month. From there you figure our how much you can save and put towards investments. Only 1 in 5 people (with financial troubles) actually use a budget! If you need budgeting assistance use the link below.
It is my hope is that you haven’t made any of these common mistakes. If you have, the good news is, you can turn things around from here! Use my tips and consult your accountant or financial advisor immediately.
