10 Really Dumb Money Mistakes To Avoid
Did you know the number one cause of divorce is money problems? It’s true. This has caused millions of families to break up, which is a shame.
According to USA Today…70% of couples argue about finances. More than half say the fights stem from what one spouse saw as a frivolous purchase. Yet there are many other causes of families having financial difficulties.
Here are 10 really dumb money mistakes to avoid, so you don’t have to get into any more arguments with your spouse or partner about money:
Mistake #1: Spending more than you earn.
This is the number 1 reason why families get in over their head with bills and credit cards, leading to personal finances out of control. That’s why one of the first things we teach our students is knowing the concept of “money in” vs. “money out.”
Mistake #2: Not saving anything.
Not having a fund set aside for a rainy day will make your stress level go through the roof when you find yourself with a real emergency. Make it a point to take 10% of what you earn, and put that in your savings account each month.
Mistake #3: Living in a place you can’t afford.
This is another financial disaster waiting to happen. If you can’t afford where you live, that means you’ll probably rely on other means to meet the bills every month, which is usually a credit card or a personal loan.
Mistake #4: Missing out on a 401k match from your employer.
It’s really a “no brainer” to contribute to your employer-funded 401k. Each time you do, up to a certain amount, your employer will add the same amount to your 401k. As the years go by, you can build a nice next egg, or retirement fund, with your boss’s help.
Mistake #5: Failing to invest savings.
While it’s essential to put aside some of the money you earn into your savings account, that money won’t make you much in return on it’s own. That’s why investing some of your savings wisely is so important.
Mistake #6: Investing with greed or desperation.
If you are expecting to make a million dollars in one year, or you’re investing because your financial back is up against a wall and you need a return on your money fast, you’ll most likely be disappointed with your results.
Mistake #7: Tapping into retirement funds early.
There are many different ways you can earn extra income if you really think about it. Even if this means getting a second job or starting a home business, that’s better than dipping into your retirement funds, that you may find hard to replace when you’re older and not working.
Mistake #8: Waiting too long to get life or disability insurance.
After you get injured and can’t work, or you pass away, is not the time to protect your family with insurance. Be proactive with your family’s future. Did you know that many life insurance policies can build cash value over time? It’s true.
Mistake #9: Failing to make a will.
You remember what happened when Prince died, right? I think there is still a probate court case going, with people who say they deserve a cut of his fortune. Don’t leave your legacy up to the courts. Making a will is fast, easy and inexpensive… even free. You can create your simple will for free, with the easy steps you’ll find at LegalZoom.com.
Mistake #10: Following a cookie-cutter approach to building wealth.
The fact is, the world of finances changes like the seasons. You must stay informed about trends and problems that can help you build your wealth, or that may decrease your wealth without you even being aware. This is why it’s always smart to have a qualified financial advisor in your corner.