Avoid These 6 Common Financial Mistakes

When it comes to saving money and watching your savings grow, there are a lot of things that most people do wrong. Financial professionals would warn you against making the follow, all-too-common mistakes.



1. Spending money on things you don’t actually want to impress others. Keeping up with the rich and famous also means keeping up with credit card debt. The average household in the U.S. has over $7k in credit card debt. A good rule of thumb is to only spend money on the things that match your values. Don’t match someone else’s priorities.

2. Dealing with your old debt first. Yes, it sounds right to catch up on old debt before working on more recent debt. However, some old debts may be beyond the statute of limitations, so the creditor can’t sue you for them anymore. Making a payment or talking to them would restart the process. If the debt is more than seven years old, it shouldn’t be on your credit report any more. If it’s less than seven years old, it won’t harm your credit report as much as a new delinquencies will.

3. Paying for a credit monitoring service. Since you can get free credit monitoring with Credit Sesame or Credit Karma, why would you put money toward another service? You can check your credit reports for free every year, too. Take advantage of what’s already available to you before spending money on services you don’t need.

4. Using only average settings on your retirement plan. When you use average rates of return, you could earn less than average. When you plan for an average life expectancy, you could live longer than average. Either way, you won’t have financial security in retirement. Conservative estimates are the best way to go. Professionals like Pete Briger of Fortress know how to advise clients to make the most of their money and investments.

5. Being too conservative with long-term investments. By not putting any money in a risky investment, you risk not making the most possible. You don’t need to put all of your money in a risky investment, but you should take a chance with a portion of it.

6. Putting too much money in one stock. An individual corporation can go bankrupt, no matter how promising it was at one time. Professionals advise that you only put between 10 and 15 percent of your earnings in a single stock.

These financial mistakes can follow you throughout your whole life, even if you eventually change your habits. By making the right choices from the beginning, you can avoid needless spending and watch your money grow right before your very eyes.