Personal Finance - Common Mistakes to Avoid

This post will take a look at some of the most common personal finance mistakes many people make. Learn and become aware of these mistakes so you can avoid them.

By giving this post some serious consideration and really analyzing your own financial behavior you may be able to save yourself a lifetime of mistakes and save yourself a lifetime of a headache.

Below you will find a list and summary of common personal finance mistakes.

Common Personal finance Mistakes

Not Creating a Working Financial Plan

You need goals and you need a plan. Hey, I am not saying that you have to set down for a month four hours a night developing some complicated blueprint of a financial itinerary and master plan. All I am saying is that if you want to be able to meet your financial goals then you first need to set your financial goals as well as have, at the very least, a mental picture of how you are going to get there. 

Once you have these basics then the rest will build over time. The best thing to do if you can afford it is to hire some finance help. Once you have your goals and needs worked out it will not be hard for a by the hour financial adviser to steer you in the right direction or even plan the whole thing if it makes sense for your budget.

Living Outside Your Means and Buying too Much on Credit

Look it is a pretty simple concept. If you spend more than you take in then you are going to go broke. If you stop pulling out that credit card and start saving and budgeting then you are going to be a much happier camper years down the road. If you don't you will be a camper on a good day.

Credit card debt is not a good thing to carry on your back on your way to retirement. It is typically high interest. The average card interest rate is 19.4%. If you are carrying a lot of debt then you should consider debt consolidation to lower the interest rate. If you are unable to consolidate or pay it off then you may want to settle your debt. Before you do that make sure you give it some serious thought. There are a lot of benefits but debt settlement is high risk and difficult to complete.

Putting Off Retirement Saving

The baby boomers of this country are the poster child for this unfortunate personal finance mistake.

Putting off your retirement savings is not a real option if you want to enjoy your retirement. As a rule of thumb, a person should save 5% of their income starting in their 20's. If you are past your 20's and in your 30's then start now and start saving 10% of your income. If you are in your 40's then 20%, if you are in your 50's then you need to be stashing away 40%.

If your past that then I apologize... but retirement may really suck for you.

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