Alexander Pope’s famous quote “To err is human” holds true for our many species driven mistakes. However, when we make a money mistake it seems to sting and leave us feeling shame and remorse.
Although money mistakes are as common as the wind blowing the snow, many money mistakes have easy fixes that will keep your money from blowing away from your bank account and wallet. As the snow settles, your financial situation can also settle. In fact, a key piece of our financial happiness is security.
Nonetheless, I’ve made a few money mistakes myself; however, with some careful planning, I was able to bring my finances back into check and you can too!
It always worries me when I see people spending money they do not have. What’s worse is having no budget at all and not taking the time to plan. In the realm of financial health, planning is key.
Some money mistakes require some life changes, but others are easy fixes. Check out the seven steps below and start turning your mistakes into a new debt-free, financially healthy life. Leave your shame and remorse as a thing of the past.
7 Common Money Mistakes and How to Fix Them
1. No Budget in Place – Not having a budget is by far the worst money mistake. Simply Stated, you cannot make your money work for you if you do not know what is coming in and going out. Creating a budget is a simple 20-minute process; however, many are scared of the information they will find. Yes, it will be an eye-opening experience and you will finally realize you are overspending, but having a budget in place will help you achieve your financial goals.
The main reasons you need a budget:
- determine cash flow
- pay bills on time (not late fees)
- stop relying on credit cards
- get out of debt
- save for an emergency fund
- plan for retirement
- plan for college
Learning how to budget may take some time, but it will be worth it in the long run. You can start by looking at your pay stubs and learning how much you are taking home. Then track your spending for one week. You can start adding your budgeting categories such as home, utilities, food, clothing, transportation, insurance, childcare, debt repayment and any other expenses. Yet, if you have more going out than you have coming in, you need to do some adjusting.