Monday, July 30, 2007

10 Money Traps to Avoid

This is a brief summary of an article from the Personal Finance section of our local paper....I thought it was important enough to post:

1) Not having a goal and a plan to achieve it - you have to know what you want to acheive and how to get there. Personally: I set Financial Resolutions each New Year, write them down and post them at my home desk, and cross them off as I compete works for me to see my progress.
2) Not being willing to change your behaviour - If you can't admit you are living beyond your means, you can't change. Try writing down your spending for a month (don't cheat)'ll be amazed when you see it on paper, and it will show you where you can cut back.
3) Not paying off your credit card debt each month -Misusing credit cards can jeopardize your financial future, you can spend YEARS trying to get out from under them.
4) Making only the minimum payment on your credit card debt- See #3.
5) Failing to save at all, or to save enough to be realistic- Build up an emergency fund that you can use for unexpected expenses. Saving 10% of your salary is the norm, but anything is better than nothing, even if you can only put $5 away a week, that's $260 a year...more so if it's in a high yield savings! (Ask me for a bonus referral link!)
6) Waiting too long to save for long term financial goals - Buying a house? College fund? Vacation? New Car? Patio Furniture? Start saving now, every little bit helps!
7)Failing to take advantage of your employeers 401k plan - This one is simple, the money is automatically taken out of your check, pre tax...and if your employer has a matching program, you are throwing money away.
8) Not having any, or enough, life insurance - It's not that expensive, it may be offered through your employers benefits, and it will provide for your family after you're gone. My regular readers know that my Mother has recently been diagnosed with Pancreatic Cancer, she nor her husband have any life insurance....I almost fell over..I made the mistake of assuming it was something basic - everyone has it, right? Wrong! Do it now.
9) Overinvesting in company stock - Look up Enron Corp.
10) Letting emotion drive decisions - I have to check myself on this one daily.