When it comes to money-smarts, not everyone is born with it. It often takes years of trial and error in order to learn the best way to handle your finances. It’s important to know that it’s perfectly normal to make mistakes as you’re first starting out in life. However, also know that the mistakes you make now will affect you as the years go on.
It’s in your best interest to try to avoid as many mistakes as you can by anticipating them ahead of time. The great news is that there are plenty of people before you who have made the same mistakes that you can learn from. Take a look at some of the biggest money mistakes and what you can do to avoid them.
Buying New
There are some things that should always buy new. Like toothbrushes or mayonnaise. However, there are other things that you can find secondhand that work just as well for a fraction of the price. Buying a vehicle used, for example, can knock off as much as 70% of the original price, depending on what kind of condition it’s in.
Don’t fall into the trap of believing that everything you purchase needs to have a new price tag attached to it. Check out secondhand options whenever possible to get the maximum amount of savings.
Using Credit Cards For Everything
A lot of people get a credit card and think it’s a magical card with free money. They use their credit card for their daily expenses and forget that not only will they have to pay it back, but with interest attached.
When you use your credit cards, you’re much more likely to spend more than you would with actual cash. Rather than falling into an unmanageable amount of debt, stop using your credit cards for your basic needs, and create a budget instead!
Borrowing Money
Everyone has tough financial times that can leave them struggling to pay the bills. The problem is that borrowing money isn’t a long term solution. It can result in a strained relationship with whoever loaned you money. You’re better off finding another solution other than borrowing from someone.
Ideally, you should have an emergency fund specifically for situations that call for money in a pinch.
Quitting Your Job With No Plan
Not everyone loves their jobs. Heck, there’s not even a big portion of the population that likes their jobs. As a result, a lot of people find themselves wanting to quit. However, if you do quit, it’s important that you have some sort of a backup plan.
Quitting your job with nothing else lined up is incredibly unwise. You’re better off finding something else first before taking the plunge.