Do you feel like you are always broke? Well, it’s probably because you are. Most people today make mistakes with their money, from saving to investing and everything in between. Are you making these common money mistakes?
Making Irrational, Crazy Investments
Image via Flickr by San Sharma
Have you ever heard about someone making what sounded like a crazy investment, and having it pay off? Of course you have. These stories go around and around. Unfortunately, it’s in our nature to think that because it happened to someone else, it will happen for us, too. Deciding to throw most or all of your money in a crazy investment scheme is, well, crazy. It may pay off, but more than likely it will leave you broke.
Being Too Scared to Invest
Do you feel like, because you don’t have $20,000 sitting around, you aren’t good enough? This is a scared mentality that you need to get over. You don’t need to be rich to invest. The earlier you invest, the more you will have in the long run. Even if you only have a small amount, invest it. What do you have to lose?
Who Needs to Listen to the Experts?
Experts have that title for a reason. It’s generally fair to say that they know something about the subject they are an expert in. Consider Kenneth L. Fisher, he is the CEO of Fisher Investments, and on the Forbes 400 Richest Americans list. He has written multiple financial books that can help you invest well and save money. However, if you ignore his advice and others in the industry, you are likely to make some major mistakes.
Do You Have an Emergency Fund?
Your investments are not your emergency fund. Too many people consider their 401k or other investment money that they can tap into in the case of a financial emergency. However, it’s important to have a separate emergency fund that can cover your bills for a few months if something goes wrong. Not having a fund for emergencies is one of the biggest mistakes people make with their money.
Not Budgeting Your Money
Do you know where your money goes each month? Most people today only have a vague idea of what their bills are, and where their money goes. Keep a budget and receipts so that you know where your money goes. This can help you understand what you are doing with your money. This is crucial if you are finding yourself in a tight spot each month. Put together a budget and stick to it.
Not Taking Full Advantage of 401k Matching
If your company does 401k matching, make sure you invest as much as the company matches. This will literally double the amount that you are investing. Though this may seem like you are taking more money out of your paycheck, it is better to think of it as investing in your future.
Everyone makes mistakes. When it comes to your money, it’s important to pinpoint the problems, and fix them as quickly as possible.