New Year?s is on the way, with resolutions in abundance and plans to fine-tune finances in plentitude. The arrival of a new year is a great time to asses your finances, but you can?t expect to revolutionize your personal finances in one go. This takes continual attention and assessment, just like my bike needs a little extra air in its tires and greese on its chain every week. The major tuneup happens only once a year, but I save myself a lot of grief by solving small problems when they are still small. That?s why you need to check in on your finances now. It?s only February and I bet you?ve already made some of these financial mistakes. Don?t let yourself be discouraged by these mistakes though, this is a great opportunity to nip them in the bud!
1. You didn?t pay your credit cards in full when you had the cash.
A little extra attention can save you a lot of money in totally avoidable bank charges. Treating your credit card more like a debit card and making sure there is always cash available to back up your charges is a way to avoid paying the exorbitant interest that credit cards can have. Always pay your credit cards in full when you have the cash, it?s a slippery slope otherwise!
2. You bought something you can?t afford.
You couldn?t pass it up, deep down you knew you shouldn?t do it, but you bought it anyway and now every time you rest your feet on the speckled cow-fur upholstered ottoman, you feel a sense of guilt and regret. We have all made purchases that we can?t afford, thinking we will just be very frugal for the next two months to make up for it, but it is always better to save up in advance of making a big purchase. If you can?t afford it, save up until you can.
3. You haven?t planned ahead.
I?ve eaten out a few more times than usual and bought an awesome ottoman that I couldn?t pass up, I got lazy and cooked a bit less at home, and before I knew it, all I could do was pay my rent and barely cover the essentials before the next paycheck. Because I didn?t plan ahead, I missed out on that ski trip my friends went on last weekend. I honestly just couldn?t afford it and it made me so frustrated. If I had just planned ahead, this wouldn?t have happened!
4. You aren?t budgeting.
Budgeting isn?t hard, it?s establishing the habit of doing it regularly that?s the difficult part. That?s why it?s February and you still haven?t started to budget. This is probably why you haven?t been able to plan ahead, and also why you bought something you couldn?t afford. One could say it?s at the heart of the issue; good personal finance starts with knowing how much you spend and on what.
5. You aren?t using free online resources to help with your personal finances.
This might be your biggest mistake so far, because all of the above mistakes would be so much easier to avoid if you took advantage of some great resources online! There are some powerful and extremely helpful tools that will save you time and effort in managing your money and making smart financial decisions. Whether it?s budgeting that you need to figure out, getting out of debt, saving, investing, or planning for a big purchase, these tools can really help inform your decisions and make your financial planning more efficient. Some resources we find to be very helpful are Mint, Betterment, SmartyPig, Learnvest and our personal favorite, SmartAsset. Read more about them and how they can help you in our recent blog post?6 Online Tools That Will Help Your Financial Resolutions Become a Reality.
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