Some people believe financial success is established through keen strategy and years of monetary planning. The truth is that sometimes the clearest path to fiscal success is paved simply by dodging some major mistakes. Here are seven key financial follies you should take pains to avoid.
Folly #1: Paying Full Price
Don’t be afraid to haggle. The cost of everything from medical bills to gym memberships can be negotiated. And remember, you’ll catch more flies with honey so be as polite as you are persistent. Do your background work by collecting coupons and making price comparisons, too.
Folly #2: Passing the Buck
Yard work, home repairs or cleaning, and car detailing – why pay someone else to do these jobs for you? Save your dollars (and burn some calories at the same time) by doing these tasks yourself.
Folly #3: Beware the Ides of April
Don’t blow your tax refund. Too often, people think their refund is a bonus check. In reality, it’s just money you loaned the government. Reinvest your hard-earned money into a savings or retirement account.
Folly #4: Splurging for the Logo
A fancier label usually hides a higher price tag. You’re better off choosing the store brand or a generic version of products like OTC medication, spices or baking materials and cleaning supplies.
Folly #5: Hiding From Your Credit
You can run, you can hide, but bad credit will find you. Putting off payments or pretending your credit card doesn’t exist will only hurt you in the end. If you are carrying debt, consider using the “Snowball Method” to pay your bills.
Folly #6: Using Credit Incorrectly
Speaking of credit, a major mistake that’s too often made is using a credit card for major purchases on depreciable items, like brand-new cars or gadgets. For instance, do you really need the newest version of your cellphone?
Folly #7: Saving While You’re Spending
First things first – you need an emergency fund. Life is unpredictable, so having a few months’ worth of cash saved should be your first priority (with retirement savings a close second). From there, you absolutely should be putting any extra money toward your debt, be it a school loan, a credit card or your mortgage.
Still not sure what the best approach is for your financial future? Or, do you have questions about securing loans, opening a line of credit or better managing your existing account? Schedule an appointment with a friendly MCU representative today.