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Finances & Money

5 Common Money Mistakes

April 14, 2007
By Clever Dude
- Leave a Comment

We often wonder “How did our finances get so screwed up?“. We have the benefit of hindsight to show us what we did wrong, but that doesn’t help us now, does it?

1. Spending too much, especially on credit. Do you budget? Do you know whether you’re spending more than you make? Do you put everything on credit and only pay the minimum each month?

2. Saving too little for emergencies and retirement. Do you have 3-6 months income of liquid savings (i.e. cash) available in case of job loss or other emergency? Are you investing in your employer’s 401? Roth IRA? Other investments?

3. Not buying enough insurance. Do you have term life insurance? Do you have short-term disability insurance? Do you have enough auto and home insurance? Does your insurance cover your bills or debt if you were to become disabled or die?

4. Not researching and waiting. How often have you rushed into a purchase and regretted the purchase later? Do you analyze the product and its competitors in detail before a purchase? How often do you purchase based on emotion? Do you spend more time analyzing small purchases (e.g. iPod) rather than large purchases (e.g. a car)?

5. Falling for get rich quick schemes. There wouldn’t be such a major market for these schemes if people didn’t fall for them. I fell for a MLM program in high school, and I still itch to pick up the phone on those late-night informercials about “real-estate investing with no money down” and “easy stock trading”.

Friends, just be smart before you buy something. Even better, decide whether you REALLY need that new gadget, car, or latte. Meet with a financial planner to determine whether you are allocating your assets appropriately across savings and retirement accounts. If you feel financially-savvy, then research on your own, but don’t delay!

Reader Interactions

Comments

  1. Adventures In Money Making says

    April 16, 2007 at 2:38 pm

    sad, but true! good post.

    Reply
  2. Nico says

    May 27, 2011 at 7:04 am

    Sad but true! These are good point about bad financial behaviour! It these harsh times people should become more aware about their finances!

    Reply

Trackbacks

  1. Fixing your money mistakes: Save, save, save at Clever Dude Personal Finance & Money says:
    April 22, 2007 at 6:37 pm

    […] first step to fixing your finances is to create a budget. Once you know what you’re spending and whether your income can cover […]

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  2. Fixing your money mistakes: Don’t fall for those scams at Clever Dude Personal Finance & Money says:
    July 30, 2007 at 7:09 am

    […] up my series of 5 Common Money Mistakes, I’d like to talk about something that many of us have done: fallen for a […]

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