Windfalls and lotto wins aside, money is not an unlimited resource for most people. Of course, what you earn determine a great deal of how much you have to spend, but so does how you manage your money as well. That is why it’s essential that you have the best money management skills possible. With that in mind, read on to find out what the most common mistake in this area is, and how you prevent them from draining your financial resources.
One of the biggest money management mistakes is buying something as soon as you see it. This is known as impulse buying, and it can seriously eat into the money that you need for things in life like vacations, property, putting your kids through college and even your social life.
Alternatively, you can keep a list of item that you want but not buy anything until a set time, such as 10 days have passed. This will then make it clearer as to whether you really need to the item or it was just the impulse to buy that was controlling your behavior.
Ignoring what is owed to you.
Next, another major mistake that a lot of people make when it comes to handling their finances is that they don’t ask for what is owed them back. In fact, this can take many forms from not claiming back vacation pay from employers to ignoring the debts family member still have to you.
However, a common way that people don’t claim back money that is owed to them by rights is when they have been in a car an accident but don’t pursue a case against the person whose fault it was. After all, it is their failure that caused you to incur medical bills and vehicle repairs, so why should you have to pay for all of these out of your own pocket?
Luckily, there are legal teams that specialize in this area. You can even check out Robinette Law for legal services related to car accident claims. Then you will be able to regain the money you lost because of someone else’s negligent or lousy driving.
You rely on credit cards.
Lastly, if you are relying on credit cards for everyday purchases and cash withdrawals, your money management could certainly do with some improving. This is because the interest rates on most credit cards are enormous and that means the more you spend on them, the harder it is to ever get back out of that debt.
In fact, as many people can only ever pay the minimum, the debt never goes away and yet still generates around a 30% charge each and every month! That is why it’s crucial that you limit credit card spending to only essential and important items. Otherwise, this mistake can seriously let down any other money management tactics that you have in place.