According to USA Today, a survey conducted by the American Psychological Association found 72 percent of its 3,000 respondents were stressed about money.
Interestingly, most people who feel this way also think they will be able to earn their way out of whatever predicament is triggering their worries.
While making more money is a worthy goal, doing better with what you already have is a sound approach to take in the interim. With that in mind, let’s look at some of the money mistakes nearly everyone makes.
Financial Free Styling
Do you have a written monthly budget?
If you answered yes to that question you’re decidedly in the minority.
Too few Americans leverage this exceptionally powerful tool. Instead, they keep a running tally in their heads, paying the bills that come due and doing whatever with the money they have left.
Operating this way makes it difficult to get ahead. A budget enables you to specifically target your dollars so they generate the greatest possible benefit for your long-term financial goals.
Having No Long-Term Plan
Look around you right now. Everything you see is the result of a plan. It’s a lot easier to build things with a plan and yes, this includes your retirement fund.
Eventually, you will be too old to work. That’s a simple fact.
This means you need to put some money away every time you get paid for that proverbial rainy day. The best way to accomplish that is with a solid financial plan.
Living Without an Emergency Fund
What would you do if your car stopped running right now? Do you have any cash put away to deal with it, or will you have to go into debt to pay for the repair?
An emergency fund gives you the wherewithal to handle it plastic free.
What would happen if your company folded tomorrow and left you with no severance package? Would you be able to pay your bills while you found another job?
You would if you had an emergency fund equal to six to 12 months of your monthly expenses put away.
Reluctance to Discuss Financial Issues
One of the biggest reasons people harbor so much anxiety about money is they believe they shouldn’t talk about it. Instead, folks suffer through financial problems in silence, even while looking for a way out. Meantime, they could be sitting right next to someone who has a solution.
If you’re in a situation in which you’re struggling to make the minimum payments on your debt, consulting a friend or reaching out to a program like Freedom Debt Relief could help you determine possible solutions for your predicament.
Always Buying New
This article was written on a 10-year-old Mac Pro, which was purchased five years ago. The desk upon which the keyboard, mouse pad and monitors sit (all of which were bought pre-owned on eBay) was acquired in a consignment store. The car in the garage is a 2005 model, bought three years ago.
Do you see the pattern?
Buying new feels good, this is true. It also consumes more of your cash. This is money that could go toward creating your emergency fund, paying down your debts and building your retirement accounts.
Meanwhile, if you shop carefully, you could be using a top-of-the-line Mac, driving a German luxury car and sitting at a solid oak desk — for less money than you’d spend for cheaper items bought new.
Who cares if someone else had them first?
Avoiding these money mistakes nearly everyone makes will help you find peace where money is concerned. It will also help you hold on to a lot more of your income.