money mistakes http://www.wisebread.com/taxonomy/term/14842/all en-US 5 Common Budget Mistakes You Can Fix Right Now http://www.wisebread.com/5-common-budget-mistakes-you-can-fix-right-now <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-common-budget-mistakes-you-can-fix-right-now" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/classic_white_piggy_bank.jpg" alt="Classic white Piggy Bank" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>As a volunteer &quot;budget coach,&quot; I've reviewed lots of people's budgets over the years. No two are exactly the same because people have different incomes, fixed expenses, priorities, and more. That's to be expected. When it comes to budgeting, there's no such thing as one-size-fits-all.</p> <p>However, there are also certain approaches to budgeting that make cash flow management easier and more effective no matter your unique circumstances. Unfortunately, the use of these approaches is all too rare. As a result, here are five of the most common mistakes I see in people's budgets. (See also: <a href="http://www.wisebread.com/10-dumb-little-budgeting-mistakes-you-need-to-stop-making-today?ref=seealso" target="_blank">10 Dumb Little Budgeting Mistakes You Need to Stop Making Today</a>)</p> <h2>1. Not budgeting based on gross income</h2> <p>It's relatively common to find budget recommendations based on <em>net</em> income &mdash; what's left after all the withholding (for taxes) and transfers (for retirement plan contributions) are taken care of. The thinking is that net income is the money that's available to you so that's what you should base your budget on.</p> <p>However, <em>gross</em> income is the purest, most complete view of your income. I prefer to use it as the starting point because some of the withholding and transfer categories are manageable.</p> <p>Take taxes, for example. About 80 percent of taxpayers got a federal tax refund this year and the average amount was $2,851. That's a lot of money you might have preferred going home in your paycheck. If you typically get a big refund, estimate how much you really should have withheld by using the <a href="https://www.irs.gov/individuals/irs-withholding-calculator" target="_blank">IRS withholding calculator</a>. You should also talk to your human resources department about having less withheld.</p> <p>Retirement plan contributions are also manageable. Listing how much you contribute each month can serve as a helpful reminder to think about whether you're contributing enough. Today, when so many workplace plans automatically set employee contribution levels &mdash; and with the default amount usually set at a low 3 percent of salary &mdash; it's especially important to consider whether that's enough.</p> <h2>2. Not putting first things first</h2> <p>Budgeting isn't just about putting all of your monthly income and expenses down on paper. It's about guiding your use of money in a way that enables you to live within your means and pursue the priorities that are most important to you.</p> <p>One reason so many people struggle to build an emergency fund or invest for the future is they haven't made those items priorities. It helps a lot to design your budget with saving, investing, and if this is important to you, giving, at the top of the outgo section.</p> <p>List them first on your budget and subtract them from your income before setting your allocations for housing, transportation, clothing, and all the rest. Trying to take care of these priorities with money that's left over after lifestyle spending usually leaves you with nothing to save, invest, or give. (See also: <a href="http://www.wisebread.com/7-easy-ways-to-build-an-emergency-fund-from-0?ref=seealso" target="_blank">7 Easy Ways to Build an Emergency Fund From $0</a>)</p> <h2>3. Not budgeting for home and car maintenance</h2> <p>One of the best ways to keep your overall housing and transportation costs down is to keep your home and vehicle maintained and to make repairs on a timely basis. That will be a lot easier if you allocate money for those purposes in your monthly budget.</p> <p>When it comes to homeownership, it seems there's always something in need of attention &mdash; from a squeaky door to a leaky faucet to a furnace that doesn't light. Depending on the age and condition of your home, $200 per month is roughly the right amount to budget for maintenance and repairs. If you own a condo or townhome, you should be able to budget less. Make sure you know what you're responsible for and what your association is responsible for.</p> <p>With vehicles, $75 per car per month is about right, but again, it depends on the condition of your vehicle. (See also: <a href="http://www.wisebread.com/bookmark-this-save-money-with-an-easy-to-follow-car-maintenance-checklist?ref=seealso" target="_blank">Bookmark This: Save Money With an Easy to Follow Car Maintenance Checklist</a>)</p> <p>You won't spend these full amounts every month, but some months you'll spend far more. During months when you don't spend your full home or vehicle maintenance and repair budget, don't spend that money on something else. Let it build up, either in your checking account or in a savings account designated for periodic bills and expenses.</p> <h2>4. Not budgeting for periodic bills and expenses</h2> <p>When my family used to live in the Chicago area, I'll never forget the first property tax bill we received. I thought maybe one of our kids had been kidnapped and this was a demand for ransom. Property taxes in Chicago are extremely high.</p> <p>That's an example of a <em>periodic </em>bill or expense &mdash; a cost that doesn't occur <em>every</em> month, but that needs to be paid at <em>some</em> point each year. If you don't plan ahead for these big, irregular expenses, they can be real budget busters. Other examples include insurance premiums, end-of-year holiday gifts, and vacations.</p> <p>Here's what to do. Include one-twelfth of the annual cost of each such item on your monthly budget. Then transfer the total of all of these monthly amounts to a savings account dedicated to these expenses. That way, when the bill comes due, there will be money set aside for it. (See also: <a href="http://www.wisebread.com/pay-these-6-bills-first-when-money-is-tight?ref=seealso" target="_blank">Pay These 6 Bills First When Money Is Tight</a>)</p> <h2>5. Not budgeting for miscellaneous expenses</h2> <p>Having a zero-based budget is a worthy goal. That means income minus expenses equals zero. However, <em>creating </em>a budget where every dollar of income is allocated to a specific outgo category is far easier than <em>following </em>such a budget. No matter how detailed your plan, there always seem to be <em>some </em>expenses that just don't fit into one of your preplanned categories.</p> <p>To cope, set a monthly budget for miscellaneous expenses. But not very much &mdash; $50 is a good limit. If miscellaneous items start running higher than that, see if some of those expenses are similar enough to warrant their own category.</p> <p>Especially if you're new to using a budget, there can be a number of frustrations that make it tempting to quit. Avoiding these five common budgeting mistakes will go a long way toward lessening the frustration factor, and that should help you stay with it.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-common-budget-mistakes-you-can-fix-right-now&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Common%2520Budget%2520Mistakes%2520You%2520Can%2520Fix%2520Right%2520Now.jpg&amp;description=5%20Common%20Budget%20Mistakes%20You%20Can%20Fix%20Right%20Now"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Common%20Budget%20Mistakes%20You%20Can%20Fix%20Right%20Now.jpg" alt="5 Common Budget Mistakes You Can Fix Right Now" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/5-common-budget-mistakes-you-can-fix-right-now">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-budget-items-you-may-be-forgetting">7 Budget Items You May be Forgetting</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-easy-ways-to-build-an-emergency-fund-from-0">7 Easy Ways to Build an Emergency Fund From $0</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-budgeting-skills-everyone-should-master">11 Budgeting Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-budget-consistently-without-a-steady-paycheck">How to Budget Consistently Without a Steady Paycheck</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-manage-your-money-no-budgeting-required">How to Manage Your Money — No Budgeting Required</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting bills expenses gross income maintenance money mistakes repairs saving money taxes withholding Fri, 10 Nov 2017 08:00:06 +0000 Matt Bell 2046509 at http://www.wisebread.com What to Expect After These 5 Personal Financial Disasters http://www.wisebread.com/what-to-expect-after-these-5-personal-financial-disasters <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-to-expect-after-these-5-personal-financial-disasters" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-625592664.jpg" alt="what to expect after financial disasters" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Financial hardships can happen despite the most careful planning and saving. If you're facing a crisis, read on to learn what you can expect to happen and how you can handle these challenges. There are always options, and you can recover from even the most feared financial situations.</p> <h2>1. You've lost your primary source of income</h2> <p>There are many reasons why you might be facing a sudden, <a href="http://www.wisebread.com/how-to-handle-a-sudden-loss-of-income" target="_blank">devastating loss of income</a>. Sometimes family, personal, or medical situations make it impossible for you to continue working; in other cases, the job itself ends, and you have to start over again. Losing your primary income source, of course, hits you hard financially. Other income &mdash; a partner's salary, perhaps, or side job &mdash; can help alleviate the financial impact. But that help is usually limited, either in amount or in duration. Here are a few things you can expect to happen.</p> <h3>Loss of savings</h3> <p>Losing your income means you quickly start relying on your emergency fund and any other savings you've accumulated. If you're able to quickly reduce your expenses, you can make your savings last longer.</p> <h3>Increased debt</h3> <p>If your savings aren't adequate, or if you face unexpected financial needs, you may find yourself debt-dependent in order to handle incoming bills. The worst case scenario is when you have to rely on high-interest debt (such as credit cards) to keep up.</p> <h3>Financial stress</h3> <p>Dealing with income loss, financial insecurity, and all the changes you have to make as a result quickly leads to stress. Stress, unfortunately, is no friend to you and decreases your ability to make smart, long-term decisions.</p> <h3>Change in lifestyle<strong> </strong></h3> <p>You'll need to cut your expenses as much as possible to handle income loss; though these changes aren't necessarily bad, they can cause emotional pain, personal discomfort, and induce more stress. Change is difficult even in positive circumstances, and change induced by financial crisis exacerbates stress and insecurity.</p> <h3>What you can do</h3> <p>There are many ways you can positively handle a loss of income:</p> <ul> <li>Do your best to reduce your immediate expenses, even if only temporarily.<br /> &nbsp;</li> <li>Call and negotiate for delayed payment plans with creditors or other major billers. (See also: <a href="http://www.wisebread.com/pay-these-6-bills-first-when-money-is-tight?ref=seealso" target="_blank">Pay These 6 Bills First When Money Is Tight</a>)<br /> &nbsp;</li> <li>Get some money coming in; even a small amount of what you used to make will help you deal with bills and expenses. (See also: <a href="http://www.wisebread.com/how-to-come-up-with-1000-in-the-next-30-days?ref=seealso" target="_blank">How to Come Up With $1,000 in the Next 30 Days</a>)<br /> &nbsp;</li> <li>Reach out to your personal and professional network for work opportunities.</li> </ul> <h2>2. You've defaulted on a loan</h2> <p><a href="http://www.wisebread.com/youve-defaulted-on-your-loan-now-what" target="_blank">Defaulting on a loan</a> feels like one of the worst possible financial situations. However, getting in over your head financially can happen to anyone. It doesn't have to end your financial future, but it will have some impact on your financial present. Here's what can happen after defaulting on a loan.</p> <h3>Lowered credit score</h3> <p>Late payments, missed payments, and account closures on debts can all bring your credit score down. A low credit score isn't the end of the world, but it will limit your ability to establish credit, get loans, or even rent a house or buy a car.</p> <h3>Calls from collection agencies</h3> <p>Different lenders have different rules, but after some period of nonpayment, your loan will most likely be passed on to a collection agency. While some agencies maintain a professional tone and approach, some do not and might become intrusive or aggressive. Even with courteous collectors, it's stressful and unpleasant to get letters and calls demanding debt repayment you know you can't afford. (See also: <a href="http://www.wisebread.com/account-in-collections-heres-how-to-fix-it?ref=seealso" target="_blank">Account in Collections? Here's How to Fix It</a>)</p> <h3>Repossession of collateral</h3> <p>If the loan you've defaulted on has collateral &mdash; such as a mortgage or car loan &mdash; you may find yourself facing repossession. Home foreclosure is usually a last resort, as it's messy and costly for mortgage companies to handle.</p> <h3>What you can do</h3> <p>The best way to handle defaulting on a loan is with proactive negotiation. Try these steps:</p> <ul> <li>Negotiate a payment plan for delayed and/or split payments in order to avoid collection agencies.<br /> &nbsp;</li> <li>Negotiate a debt settlement with the bank or credit holder. You'll usually need to make a cash payment, but only for a percentage of the total amount owed in order to clear the debt entirely.<br /> &nbsp;</li> <li>Contact your mortgage company if the loan defaulted on is your house mortgage; explain your situation and ask them to help you work out an affordable, alternate payment plan. They don't want your house; they want your cash, and they may be willing to negotiate terms and minimum payments.<br /> &nbsp;</li> <li>Examine options to <a href="http://www.wisebread.com/5-tricks-to-consolidating-your-debt-and-saving-money" target="_blank">consolidate all your debt</a> into a single, smaller payment you can afford.</li> </ul> <h2>3. You've lost money in an investment</h2> <p>So you took some of your hard-won savings and decided to invest. Maybe it was in a friend's startup, a real estate project, or a stock that seemed like a sure thing. It didn't work out, and now you've got to handle the fallout. Assess the impact and start taking positive steps forward. Here are a few things you might initially face:</p> <h3>Loss of money</h3> <p>The most obvious consequence, of course, is the loss of your money; that hurts. Remember, however, that just as you lost money, you can also invest and save money. One painful investment loss does not poison the rest of your savings or investments.</p> <h3>Loss of confidence</h3> <p>The psychological impact of a bad money move can make you doubt your own financial prowess and decisions. It's okay to question yourself, but you want to learn, not stay stuck. (See also: <a href="http://www.wisebread.com/your-loss-aversion-is-costing-you-more-than-your-fomo?ref=seealso" target="_blank">Your Loss Aversion Is Costing You More Than Your FOMO</a>)</p> <h3>Smaller retirement savings</h3> <p>If you were counting on the return from this investment as a key part of your retirement savings, you're now facing a major blow to your retirement plan.</p> <h3>Less ability to invest</h3> <p>A loss of money means, of course, lowered liquidity. You may not be financially able to build up savings quickly, which reduces your ability to invest and start rebuilding your portfolio.</p> <h3>What you can do</h3> <p>You don't have to run away from investing (nor should you!) because you made one choice that didn't work out. Start proactively using these options to recover:</p> <ul> <li>Meet with a financial planner to assess your options and go over any lingering financial questions or doubts.<br /> &nbsp;</li> <li><a href="http://www.wisebread.com/6-fast-ways-to-restock-an-emergency-fund-after-an-emergency" target="_blank">Rebuild emergency savings</a>, if you've used them up as part of your investment.<br /> &nbsp;</li> <li>Lower expenses or increase income to replace what you've lost, by cutting back on expenses and <a href="http://www.wisebread.com/14-best-side-jobs-for-fast-cash" target="_blank">adding in some side work</a> for a while.<br /> &nbsp;</li> <li>Keep your savings steady; build up to a minimum investment amount and examine the safest high-yield options for your next investment.</li> </ul> <h2>4. You've racked up high-interest debt</h2> <p>It's never the plan to get stuck with high-interest debt. But with the right (or wrong) combination of life events and decisions, you can find yourself there. High-interest debt is a particularly bad kind of debt: If you can't make more than the minimum payments, your debt will continue to grow at a very fast rate. It's likely you'll be facing some unpleasant consequences such as:</p> <h3>Poor credit score<strong> </strong></h3> <p>If you've made a late payment or missed one altogether, your credit score can be affected negatively. And if you've accumulated more debt than you can manage, and you're frequently missing payments while you try to keep up, your credit score can take a big hit.</p> <h3>Loss of opportunities</h3> <p>When you're struggling to keep up with debt payments, you're limited. Whether it's an investment opportunity or the chance to enjoy some time off with friends, the burden of high-interest debt can keep you from affording the opportunities that come your way.</p> <h3>Financial embarrassment</h3> <p>Many people still struggle with feeling ashamed or embarrassed about having debt, even though having debt &mdash; a lot of it &mdash; is quite common. In fact, according to a 2017 poll conducted by Northwestern Mutual, 40 percent of Americans spend about half their monthly income on debt payments.</p> <h3>What you can do</h3> <p>Being burdened with high-interest debt may feel like a problem you can't solve, but there are steps you can take to reduce its impact on your life. Start with these actions:</p> <ul> <li>Communicate with the debt holder if you've fallen behind on payments. You can often negotiate a split or delayed payment, as long as you can guarantee a payment of some kind.<br /> &nbsp;</li> <li>Learn about <a href="http://www.wisebread.com/the-7-best-credit-card-debt-elimination-strategies" target="_blank">debt repayment strategies</a> and which one might work best for you.<br /> &nbsp;</li> <li>Whatever you do, don't add any more to your debt! Put away any active credit cards and <a href="http://www.wisebread.com/are-you-spending-too-much-on-normal-expenses" target="_blank">reduce normal expenses</a> so you can live on your income without adding more debt to your life.</li> </ul> <h2>5. You're recovering from a divorce</h2> <p>Divorce not only has a huge impact on your emotional and psychological state, but also on your financial well-being. First, divorce itself is expensive; the average cost is between $15,000 and $20,000. In addition to footing your part of that bill, you might also face some of these huge costs:</p> <h3>Disproportional expenses</h3> <p>You might find that your expenses, carried over from your pre-divorce life, exceed your current, post-divorce income. You can reduce or eliminate expenses, but sometimes you're locked into agreements (such as a lease or a cellphone service contract) that keep you at a higher expense level than you can reasonably afford.</p> <h3>Lowered investment returns</h3> <p>If you and your former spouse were contributing to a joint account, you'll have to divide that up somehow in the divorce proceedings. If it's an even split, your half in an account by itself will produce reduced returns.</p> <h3>Big tax bills</h3> <p>If part of your divorce was to liquidate and divide all assets, you might be in for an unpleasant surprise when tax time rolls around. You may have to pay a hefty capital gains tax on certain investments or other assets that have been liquidated.</p> <h3>What you can do</h3> <p>By taking some smart steps forward, you can reduce the negative financial impact that a divorce has on you. Make these moves to take control of your financial life, post-divorce:</p> <ul> <li>Meet with a financial consultant as soon as possible to develop a plan for maximizing your investments and keeping your retirement savings on track. (See also: <a href="http://www.wisebread.com/5-money-moves-to-make-the-moment-you-decide-to-get-divorced?ref=seealso" target="_blank">5 Money Moves to Make the Moment You Decide to Get Divorced</a>)<br /> &nbsp;</li> <li>Call and negotiate with contract holders to eliminate any lingering, too-high expenses. There may be a buyout option you can take.<br /> &nbsp;</li> <li>If possible, delay liquidation of shared assets or investments until you fully understand the taxes or fees that you'll face when they are liquidated. (See also: <a href="http://www.wisebread.com/how-to-protect-yourself-financially-during-a-divorce-or-separation?ref=seealso" target="_blank">How to Protect Yourself Financially During a Divorce or Separation</a></li> </ul> <p>It's not easy to recover from a financial disaster, but recovery is always an option. The most important things you can do are, first, face the situation squarely in order to figure out what your best options truly are. You may have more than you think.</p> <p>Secondly, don't be afraid to ask for help, which doesn't necessarily mean asking for money. Rather, you may be able to get help from your creditors (lowered payments), from your network (job opportunities), from your local community (selling your car, building a side hustle), and more.</p> <p>Moving forward and rebuilding takes time, but it's within your power.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fwhat-to-expect-after-these-5-personal-financial-disasters&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWhat%2520to%2520Expect%2520After%2520These%25205%2520Personal%2520Financial%2520Disasters.jpg&amp;description=What%20to%20Expect%20After%20These%205%20Personal%20Financial%20Disasters"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/What%20to%20Expect%20After%20These%205%20Personal%20Financial%20Disasters.jpg" alt="What to Expect After These 5 Personal Financial Disasters" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/annie-mueller">Annie Mueller</a> of <a href="http://www.wisebread.com/what-to-expect-after-these-5-personal-financial-disasters">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-complacency-is-keeps-you-from-financial-security">How Complacency Keeps You From Financial Security</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past">It&#039;s Never Too Late to Fix These 5 Money Mistakes From Your Past</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-financial-resolutions-you-can-conquer-before-new-years">10 Financial Resolutions You Can Conquer Before New Year&#039;s</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-start-a-family-before-reaching-these-5-money-goals">Don&#039;t Start a Family Before Reaching These 5 Money Goals</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-financial-gifts-to-give-yourself-this-holiday-season">13 Financial Gifts to Give Yourself This Holiday Season</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance debt default disasters emergency funds expenses income loss investments job loss loans money mistakes side gigs Mon, 11 Sep 2017 08:00:05 +0000 Annie Mueller 2017980 at http://www.wisebread.com How Reliving Past Money Mistakes Hurts Your Financial Future http://www.wisebread.com/how-reliving-past-money-mistakes-hurts-your-financial-future <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-reliving-past-money-mistakes-hurts-your-financial-future" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_looking_at_wallet_money_dollar_banknotes_flying_away.jpg" alt="Man looking at wallet money dollar bank notes flying away" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Past money mistakes are a little like zombies: Just when you think you've finally destroyed them, they rise again.</p> <p>It's time for you let those old mistakes go. Not only does focusing on your past money mistakes make you feel bad without actually improving the situation, but spending time thinking about your past misjudgements makes you more likely to repeat them.</p> <p>Here's how focusing on past money mistakes keeps you shambling from one bad financial decision to the next, and how you can avoid that fate.</p> <h2>Shame can be a downward spiral</h2> <p>In many cases, when you are focused on a money mistake you made in the past, you are using the word &quot;should&quot; to describe what happened. For instance, you might be thinking something like:</p> <ul> <li> <p>I shouldn't have co-signed a loan with my shiftless brother-in-law.</p> </li> <li> <p>I should have started saving for retirement much earlier.</p> </li> <li> <p>I shouldn't have used student loans to go on spring break.</p> </li> </ul> <p>These &quot;should&quot; statements aren't necessarily wrong &mdash; they're just useless. You are probably correct that you should have acted differently in the past, but since it's impossible to go back in time, all you are doing is making yourself feel bad for something you can't change.</p> <p>This thought process can cause further financial damage, too. For instance, if you feel like you <em>should</em> have started saving for retirement earlier, that fact is only going to make you feel terrible about not having done so. From there, it's an easy jump to think that there is no point in starting now since you are already so far behind. (See also: <a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make?ref=seealso" target="_blank">7 Retirement Planning Steps Late Starters Must Make</a>)</p> <h3>Ask yourself &quot;Now what?&quot;</h3> <p>Feeling ashamed of the things you've done in the past is a form of sunk cost fallacy. Sunk costs are the time, money, or resources that have already been spent and can't be recouped. The sunk cost fallacy is when we value sunk costs over future choices.</p> <p>When you're feeling ashamed of a past decision, you're overvaluing that past decision and allowing it to affect your current emotional state and decisions. Instead of simply thinking &quot;I shouldn't have co-signed that loan,&quot; it makes more sense to complete the thought. &quot;I shouldn't have done it, but I did &mdash; so now what?&quot;</p> <p>Instead of getting caught in your shaming thought process, asking yourself &quot;Now what?&quot; allows you to start making decisions based on what the situation actually is.</p> <h2>Trying to learn from mistakes can backfire</h2> <p>What if you are focusing on your past mistakes in an attempt to learn from them? You understand that you can't change the past, but you can certainly learn from it, right?</p> <p>Well, not necessarily, according to a 2016 New York University study. When you focus on trying to figure out why you made a mistake in the past while trying to make a similar decision in the present, you don't have as much mental bandwidth to devote to the decision at hand. Thinking about your past mistake &quot;triggers a cascade of computations&quot; which distract from the decision at hand, Roozbeh Kiani, assistant professor at New York University's Center for Neural Science, told The Atlantic in 2016.</p> <h3>Let your brain reset</h3> <p>The best way to keep yourself from being distracted by your past mistakes when making a similar decision in the present is to take a little time away from the problem. In Kiani's study, participants didn't get overwhelmed by negative feedback after a mistake if they took a break before trying the task again.</p> <p>So, think about something else for a while and come back to your financial issue after you've let your brain reset. That will help you make a more rational decision.</p> <h2>You can fall for feel-good mistakes again</h2> <p>Another major problem with letting ourselves focus on past mistakes is that our brains are wired to repeat actions that were rewarding once, even if they are no longer rewarding &mdash; anyone who has tried to kick a sugar, cigarette, or debt habit can attest to that. (See also: <a href="http://www.wisebread.com/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past?ref=seealso" target="_blank">It's Never Too Late to Fix These 5 Money Mistakes From Your Past</a>)</p> <p>According to Susan Courtney, a cognitive neuroscientist at Johns Hopkins University and a co-author of a 2016 study into this phenomenon, this can be a hard thing to overcome. &quot;When my gaze drifts toward the doughnuts in the mailroom,&quot; she told The Atlantic, &quot;that triggers a thought process of what it would be like to taste that doughnut. That makes it harder to resist.&quot;</p> <p>If you are regretting past mistakes that felt great at the time, focusing on those past mistakes will do nothing but further entrench your interest in them and awareness of them. The more you think about how much you regret buying all of those shoes (which you enjoyed at the time), the more likely it is that your attention will be caught by shoe sales in the future &mdash; making it that much harder to change your spending habits.</p> <h3>Focus on the future</h3> <p>Rather than thinking about these felt-good-at-the-time mistakes, it makes more sense to think through what you want your future to look like. That kind of thought process will not only distract you from the enticing potential mistakes that surround you, it can potentially also start charting a different neural wiring that will reward you for intelligent financial behavior.</p> <h2>Letting go of your mistakes</h2> <p>Past financial mistakes don't need to keep coming back to haunt you. Let go of your shame, take a break from thinking about your finances, and don't assume that obsessing over old mistakes will help you learn from them. Instead, focus on your future and let your past stay in the past. (See also: <a href="http://www.wisebread.com/20-money-mistakes-everyone-makes-but-no-one-talks-about?ref=seealso" target="_blank">20 Money Mistakes Everyone Makes But No One Talks About</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-reliving-past-money-mistakes-hurts-your-financial-future&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520Reliving%2520Past%2520Money%2520Mistakes%2520Hurts%2520Your%2520Financial%2520Future.jpg&amp;description=How%20Reliving%20Past%20Money%20Mistakes%20Hurts%20Your%20Financial%20Future"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20Reliving%20Past%20Money%20Mistakes%20Hurts%20Your%20Financial%20Future.jpg" alt="How Reliving Past Money Mistakes Hurts Your Financial Future" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/how-reliving-past-money-mistakes-hurts-your-financial-future">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past">It&#039;s Never Too Late to Fix These 5 Money Mistakes From Your Past</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-mistakes-to-stop-making-by-50">5 Money Mistakes to Stop Making by 50</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-expect-after-these-5-personal-financial-disasters">What to Expect After These 5 Personal Financial Disasters</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-financial-mistakes-to-stop-making-by-age-40">6 Financial Mistakes to Stop Making by Age 40</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-a-surprise-credit-limit-increase-can-harm-you">How a Surprise Credit Limit Increase Can Harm You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bad habits debt fixing money mistakes moving on problems psychology shame Thu, 31 Aug 2017 09:00:06 +0000 Emily Guy Birken 2012629 at http://www.wisebread.com 5 Money Moves That Will Ruin Your Mortgage Application http://www.wisebread.com/5-money-moves-that-will-ruin-your-mortgage-application <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-money-moves-that-will-ruin-your-mortgage-application" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/housing_market_risk.jpg" alt="Housing market risk" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When applying for a mortgage, you shouldn't do anything that will cause a bank to question your ability to repay the loan. You don't need perfect finances to get a mortgage, but it's in your best interest to have a basic understanding of loan requirements. The more you know, the less likely you are to make mistakes that can ruin your application. (See also: <a href="http://www.wisebread.com/make-these-5-money-moves-before-applying-for-a-mortgage?ref=seealso" target="_blank">Make These 5 Money Moves Before Applying for a Mortgage</a>)</p> <p>Here are a few missteps to avoid if you're thinking about buying a house.</p> <h2>1. Paying for everything with cash</h2> <p>Using cash for everyday purchases is one way to avoid debt. But just because cash is king in your world doesn't mean you should cast off credit cards.</p> <p>Unless you're fortunate enough to pay cash for a house, you'll need to apply for financing, which requires a credit history. And the only way to build credit is to use credit. Without any type of credit profile, a mortgage underwriter can't assess whether you're capable of responsibly managing a home loan.</p> <p>In the lending world, no credit can be just as damaging as bad credit. So before applying for a home loan, establish credit by getting a credit card or another type of loan. You don't have to drive yourself into debt with it, but you should demonstrate a pattern of timely payments and responsible borrowing. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <h2>2. Carrying too much debt</h2> <p>While it's in your best interest to have a responsible credit profile, if you start spending money on stuff you don't need and get in over your head, you could hurt your chances of a mortgage approval. Maxing out credit cards can raise your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score" target="_blank">credit utilization ratio</a> and lower your credit score. Credit utilization is the percentage of your credit card debt compared to your credit limit.</p> <p>If you go overboard and accumulate too much debt, there's also the risk of falling behind on payments. Late payments are another credit score killer that can destroy any chance of qualifying for a mortgage.</p> <p>To avoid problems with a mortgage approval, get into a habit of paying off credit card balances in full every month. If you carry a balance, keep it small &mdash; ideally below 30 percent of your credit line.</p> <p>If you've already been approved for a mortgage, don't make any major purchases before closing on the home purchase. This includes buying furniture or financing a new car. New debt increases your debt-to-income ratio, which can affect your approval.</p> <p>Since you won't know your actual mortgage costs until a few days before closing, hold off spending money on new furniture or appliances to ensure you have enough cash on hand.</p> <h2>3. Co-signing for someone else</h2> <p>Co-signing a loan for a friend or relative is a noble deed (one that I do not personally recommend), but it's imperative that you're fully aware of the consequences of this decision. Co-signers are not silent partners on loan documents. By signing your name, you become a joint debt holder; as such, a co-signed debt appears on your credit report and counts toward your debt-to-income ratio. This is because you're responsible for the loan if the primary signer stops paying. (And if this happens, you could be in big trouble financially!)</p> <p>Once you are ready to apply for a mortgage, your lender takes a co-signed debt into consideration when calculating your debt-to-income ratio. Unfortunately, with a co-signed debt on your credit file, a lender might say you owe too much to take on additional debt and deny your mortgage application.</p> <h2>4. Not saving enough cash</h2> <p>You need cash for a home purchase &mdash; a <em>lot </em>of cash. Nowadays, many mortgage programs require borrowers to bring cash to the table. This includes a down payment between 3.5 percent to 5 percent or higher, as well as funds for closing (between 2 percent and 5 percent of the sale price). It doesn't matter how much you earn: If you can't show enough assets, you can't get a mortgage. Build up this cushion first before diving into the homebuying process. (See also: <a href="http://www.wisebread.com/4-easy-ways-to-start-saving-for-a-down-payment-on-a-home?ref=seealso" target="_blank">4 Easy Ways to Start Saving for a Down Payment on a Home</a>)</p> <h2>5. Quitting your day job</h2> <p>Don't quit your day job if you're planning to buy in the near future &mdash; at least, not yet.</p> <p>Qualifying for a mortgage involves demonstrating long-term financial stability. This is why lenders require a borrower's most recent paycheck stubs and the previous year's tax returns. Self-employed people can purchase a home like anyone else, but they have to provide one to two years of profitable business tax returns, where their income either increases from year to year or remains roughly the same.</p> <p>It doesn't matter how much you're making today as a self-employed borrower. If a lender has reason to believe that your income isn't consistent or stable, you might not get a loan. So if you're thinking about buying, stick with your job until closing, and then become your own boss. (See also: <a href="http://www.wisebread.com/denied-a-mortgage-heres-how-to-fix-it-fast?ref=seeaslo" target="_blank">Denied a Mortgage? Here's How to Fix It Fast</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fthe-5-best-travel-adapters&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Money%2520Moves%2520That%2520Will%2520Ruin%2520Your%2520Mortgage%2520Application.jpg&amp;description=5%20Money%20Moves%20That%20Will%20Ruin%20Your%20Mortgage%20Application"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Money%20Moves%20That%20Will%20Ruin%20Your%20Mortgage%20Application.jpg" alt="5 Money Moves That Will Ruin Your Mortgage Application" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/5-money-moves-that-will-ruin-your-mortgage-application">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-benefits-of-carrying-a-mortgage-into-retirement">5 Benefits of Carrying a Mortgage Into Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-pay-your-mortgage-off-early">Should You Pay Your Mortgage Off Early?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-mortgage-details-you-should-know-before-you-sign">5 Mortgage Details You Should Know Before You Sign</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-you-shouldnt-buy-a-house-yet">5 Reasons You Shouldn&#039;t Buy a House (Yet)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing cash co-signing credit history credit utilization debt debt to income ratio home buying homeownership money mistakes mortgages quitting Wed, 16 Aug 2017 08:30:07 +0000 Mikey Rox 2003615 at http://www.wisebread.com 7 Critical Money Mistakes People Make in Their 40s http://www.wisebread.com/7-critical-money-mistakes-people-make-in-their-40s <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-critical-money-mistakes-people-make-in-their-40s" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_calculating_budget.jpg" alt="Couple Calculating Budget" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The younger you are, the more time you have to bounce back from a financial mistake. As you inch closer to those retirement years, however, and as financial obligations expand, it's increasingly important to safeguard the assets you have &mdash; and to prepare for costly expenses that inevitably crop up as youth glides into middle age.</p> <p>The experts agree: Even 40-somethings who feel confident about their finances are likely to make a few money mistakes. Which are the most common? Here, the financial pros tell all.</p> <h2>1. An expensive home remodel</h2> <p>The average cost to remodel a few rooms is upward of $37,000, according to data compiled by Home Advisor. It could cost even more &mdash; as much as $125,000 &mdash; depending on the size and location of the home.</p> <p>Michael Frick, president of Promenade Advisors LLC, thinks that money could be much better spent by paying down an existing mortgage. &quot;Forty-somethings need to realize that retirement is only 20 to 30 years away in most cases,&quot; he said. &quot;Do they still want to have that large mortgage payment while they are retired on a fixed income? Will they even have enough retirement income to continue making those payments?&quot;</p> <p>Even worse, he added, is that many homeowners finance those pricey home renovations by borrowing from their existing home equity or &mdash; even worse &mdash; by raiding their 401(k) funds. The added monthly payments from a 401(k) loan can crimp the amount of money available to boost retirement savings during critical, high income-earning years.</p> <h2>2. Prioritizing kids' college over retirement savings</h2> <p>Most kids today expect their folks to pony up for the full cost of college, no matter which institution they choose. So says a 2016 <em>Parents, Kids &amp; Money</em> survey released by investment firm T. Rowe Price. Most parents want to comply.</p> <p>Still, midlife is &quot;a period in which you should assess whether you're on track to fund the subsequent stages of your own adulthood,&quot; said Anthony M. Montenegro of Blackmont Advisors. As children age, &quot;it's not uncommon for parents to continue putting kids ahead of themselves &mdash; even at the expense of their own needs.&quot;</p> <p>&quot;One way to look at this trade-off is to ask yourself, 'Am I willing to delay retirement and keep working another five to 10 years to fund my children's college?'&quot; said Alex Whitehouse, president and CEO of Whitehouse Wealth Management. Plus, he added, a student who works to help pay for school will have &quot;skin in the game,&quot; which can create a greater appreciation for the value of the education.</p> <p>If there's an additional need for tuition funds, &quot;money can be borrowed through student loans,&quot; Whitehouse added. &quot;You can't borrow money for retirement.&quot; (See also: <a href="http://www.wisebread.com/why-saving-too-much-money-for-a-college-fund-is-a-bad-idea?ref=seealso" target="_blank">Why Saving Too Much Money for a College Fund Is a Bad Idea</a>)</p> <h2>3. Skipping the estate plan</h2> <p>&quot;The term 'estate planning' sounds like something old, rich people need to transfer their mansion and paintings,&quot; said Whitehouse. Still, anyone with basic assets they want to share with a loved one (or even with a chosen charity) should have, at minimum, a basic will.</p> <p>No one wants to consider their own eventual demise but, even so, &quot;lack of planning can lead to painful consequences for heirs, including a lengthy probate process, loss of control, and potentially even disinheritance,&quot; added Whitehouse.</p> <p>For a straightforward will, there are inexpensive online DIY options available like <a href="http://store.nolo.com/products/quicken-willmaker-plus-wqp.html" target="_blank">Quicken WillMaker</a> and <a href="https://www.legalzoom.com/personal/estate-planning/last-will-and-testament-pricing.html" target="_blank">LegalZoom</a>. An attorney can help create a more comprehensive estate plan or set up a trust.</p> <h2>4. Not saving enough</h2> <p>&quot;Lifestyle creep can be a major problem for those in their 40s. As they earn more, many families increase their spending on luxury items or dinner at expensive restaurants, rather than save the extra income,&quot; said Andrew Rafal, founder and president of Bayntree Wealth Advisors.</p> <p>Small spending increases can be detrimental because they tend to happen slowly over time, and tend to mirror pay raises, so it's easy to not take notice.</p> <p>Instead of spending those pay raises, Joshua P. Brein, president of Brein Wealth Management, suggests splitting the difference. &quot;I always say it's a good idea to give your savings a raise if you get a raise yourself,&quot; he said. &quot;If your savings habits don't match your increased income and instead stay small &mdash; even though your income grows &mdash; you could be underfunding retirement and falling behind inflation. When you retire, things will undoubtedly cost more than they do today, so save like it!&quot;</p> <p>Still, Brein still gives income earners carte blanche to spend half their raises. That means you can save more while also increasing your standard of living over time. (See also: <a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion?ref=seealso" target="_blank">8 Money Moves to Make the Moment You Get a Promotion</a>)</p> <h2>5. Being underinsured</h2> <p>Many 40-somethings have children or other family members who are financially dependent upon them. Even so, &quot;many people in their 40s are underinsured,&quot; said Rafal. That means an unexpected injury, disability, or even death has the potential to torpedo even the most seemingly stable situation.</p> <p>Rafal recommends taking advantage of any group life and disability plans offered by an employer, but also maintaining personal policies that are opened outside of the workplace. &quot;That way you have the peace of mind that your family is properly insured even if you switch employers,&quot; he said. (See also: <a href="http://www.wisebread.com/4-things-you-need-to-know-about-disability-insurance?ref=seealso" target="_blank">4 Things You Need to Know About Disability Insurance</a>)</p> <h2>6. A skimpy emergency fund</h2> <p>That three to six months' worth of expenses you set aside in your 20s may not be enough to replace your income today, if you were to need it. &quot;Pretty much everything you own today is more valuable than it was 10 or 15 or 20 years ago,&quot; said Charles C. Scott, co-creator of FinancialChoicesMatter.com and founder of Pelleton Capital Management. &quot;Your house is worth more. Your car is worth more. It costs more to take care of your health at this age than years ago, both because you're older, but also because health care costs are a lot higher.&quot;</p> <p>Many midlife workers fail to adjust their emergency safety cushion to account for those increased expenses and earnings. If an unexpected emergency were to arise, and you haven't recalculated in a while, a meager account balance may not stretch as far as expected.</p> <h2>7. Paying too much for investment advice</h2> <p>Lower investment fees and higher performance returns go together like peanut butter and jelly. That's according to the recent research paper<em> Predictive Power of Fees</em>, released by investment researcher Morningstar. Still, many investors, even the most intelligent ones, don't fully understand the investment fees they're paying.</p> <p>&quot;What you don't know could be greatly hurting you,&quot; said Matthew Jackson, president of Solid Wealth Advisors. Fee information is often hidden deep within a mutual fund's prospectus or annual shareholder report. If you don't know what you're looking for, the information can be difficult to find.</p> <p>Then there are the fees you're paying your financial adviser or broker. &quot;Take the time to learn exactly how much you are paying for advice. Often, commissions and fees are obscure and not easily understandable.&quot;</p> <p>The good news is that even &quot;the worst money mistakes people make in their 40s can be fixed rather easily,&quot; said Jackson. First, he suggested, get engaged with your money. &quot;Take the time to learn the basics. In the information age, it's never been easier to learn about asset allocation, maximum portfolio drawdowns, and portfolio volatility.&quot; In short, a little knowledge can go a long way. By learning a little, &quot;people in their 40s can avoid a lot of pain in their portfolios,&quot; Jackson added. (See also: <a href="http://www.wisebread.com/the-surprising-truth-of-investing-mediocre-advice-is-best?ref=seealso" target="_blank">The Surprising Truth of Investing: Mediocre Advice Is Best</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/alaina-tweddale">Alaina Tweddale</a> of <a href="http://www.wisebread.com/7-critical-money-mistakes-people-make-in-their-40s">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-putting-off-these-9-adult-money-moves">Are You Putting Off These 9 Adult Money Moves?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-start-a-family-before-reaching-these-5-money-goals">Don&#039;t Start a Family Before Reaching These 5 Money Goals</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-financial-gifts-to-give-yourself-this-holiday-season">13 Financial Gifts to Give Yourself This Holiday Season</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moments-that-should-be-on-everyones-bucket-list">8 Money Moments That Should Be On Everyone&#039;s Bucket List</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance 40s college funds emergency funds estate planning inflation life insurance midlife money mistakes retirement saving money Thu, 15 Jun 2017 09:00:10 +0000 Alaina Tweddale 1961115 at http://www.wisebread.com 6 Foolish Ways to Pay Down Debt http://www.wisebread.com/6-foolish-ways-to-pay-down-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-foolish-ways-to-pay-down-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/reduce_debt_concept.jpg" alt="Reduce debt concept" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Living paycheck to paycheck is even more challenging with loads of high-interest debt. At the end of the month, you've worked hard and barely made a dent in the principal you owe.</p> <p>Sound familiar? If so, it's time to develop a repayment strategy that avoids common gimmicks and shortsighted solutions that only dig a deeper hole. Here are six terrible ways to get out of debt.</p> <h2>1. Depleting your retirement account</h2> <p>Taking a loan against your 401(k) account is a trifecta of bad ideas. First, your employer may not allow you to make new contributions until the loan is repaid in full. Second, because of those loan payments, you'll take home less money &mdash; a situation that can turn household budgets upside down and may tempt you to revert to bad credit habits. Third, if you leave your job, the outstanding loan amount must be repaid immediately. Not able to swing it? Then you'll get hit with early withdrawal fees and be responsible for income tax on the balance. (See also: <a href="http://www.wisebread.com/7-traps-to-avoid-with-your-401k?ref=seealso" target="_blank">7 Traps to Avoid With Your 401(k)</a>)</p> <h2>2. Consolidating debt with a high-interest loan</h2> <p>Whack-a-Mole is a classic arcade game, not a debt repayment strategy. Consolidating debt into a single loan <em>only </em>works if the interest rate is low (that is, significantly lower than your average credit card rate). Proceed with caution. Understand the terms of any loan that's offered and don't be seduced by low monthly payment amounts that actually keep you paying for a longer period of time. (See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=seealso" target="_blank">5 Ways to Pay Off High Interest Credit Card Debt</a>)</p> <h2>3. Borrowing against your home</h2> <p>What's worse than being in debt? Being homeless and in debt. If your current debt is unsecured (that is, not tied to any property as collateral), why secure it by folding it into your mortgage? If you don't pay back an unsecured debt, you'll end up with a bad credit score. But &mdash; and this is a <em>big but </em>&mdash; if you don't repay a home-equity loan, you'll end up with a bad credit score and a foreclosure.</p> <h2>4. Draining your emergency fund</h2> <p>An emergency fund serves a singular purpose: It's a safety net that helps people cope with a job loss or unexpected expense without resorting to high-interest credit cards. Tapping your emergency fund to pay off unsecured debt today jeopardizes your financial security and can leave you exposed to even higher debt levels tomorrow. (See also: <a href="http://www.wisebread.com/a-step-by-step-guide-to-creating-your-emergency-fund?ref=seealso" target="_blank">A Step-by-Step Guide to Creating Your Emergency Fund</a>)</p> <h2>5. Working with a debt settlement company</h2> <p>Sure, convincing your creditors to accept a lump-sum payment of less than what's owed sounds fantastic. But debtors beware: Sometimes <a href="http://www.wisebread.com/6-ways-debt-settlement-can-leave-you-deeper-in-debt-even-with-trustworthy-companies?ref=internal" target="_blank">debt settlement can make things worse</a>. As part of the lengthy and fee-riddled settlement process, you must stop paying your debts &mdash; an act that triggers collection calls, late fees, and negative credit reporting. And even if all your creditors agree to the settlement terms (there are no guarantees), it'll take years to rebuild your credit score.</p> <p>To better understand your debt, connect with a <em>nonprofit </em>credit counseling service instead. (The FTC has some tips on <a href="https://www.consumer.ftc.gov/articles/0153-choosing-credit-counselor" target="_blank">finding and choosing a reputable credit counseling service</a>.) These agencies help consumers review their budgets and design a repayment plan that's realistic and effective. They may negotiate with creditors on your behalf to lower penalties and interest charges, but they won't go to the drastic and credit-damaging lengths that many debt settlement companies do.</p> <h2>6. Borrowing from family or friends</h2> <p>While borrowing from those closest to you may seem like a reasonable way to avoid predatory debt-settlement services and high-interest loans, it's a quick way to shorten your Christmas list permanently. One missed payment or one obvious personal splurge builds ill will that's difficult to overcome. Unless you're absolutely certain you can pay back the money without a single hiccup, avoid mixing finances with family and friends.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-foolish-ways-to-pay-down-debt&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Foolish%2520Ways%2520to%2520Pay%2520Down%2520Debt.jpg&amp;description=6%20Foolish%20Ways%20to%20Pay%20Down%20Debt"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Foolish%20Ways%20to%20Pay%20Down%20Debt.jpg" alt="6 Foolish Ways to Pay Down Debt" width="250" height="374" /></p> <p>&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/6-foolish-ways-to-pay-down-debt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-moves-that-will-ruin-your-mortgage-application">5 Money Moves That Will Ruin Your Mortgage Application</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-do-if-youre-retiring-with-debt">What to Do If You&#039;re Retiring With Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-use-a-credit-card-for-an-emergency-without-drowning-in-debt">How to Use a Credit Card for an Emergency Without Drowning In Debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-strategies-for-paying-off-debt-when-living-on-a-variable-income">7 Strategies for Paying Off Debt When Living on a Variable Income</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/your-brain-is-keeping-you-in-debt-and-how-to-fix-it">Your Brain Is Keeping You in Debt (And How to Fix It)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management 401(k) loan borrowing money debt settlements emergency fund high interest debt home equity loan money mistakes mortgages repayment Tue, 13 Jun 2017 08:00:10 +0000 Kentin Waits 1961854 at http://www.wisebread.com Flashback Friday: 52 Money Mistakes You Need to Stop Making http://www.wisebread.com/flashback-friday-52-money-mistakes-you-need-to-stop-making <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/flashback-friday-52-money-mistakes-you-need-to-stop-making" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_no_money_489081790.jpg" alt="Man making money mistakes he needs to stop making" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Too much credit card spending. Not having an emergency fund. Waiting to save for retirement. Making a money mistake or two like these is fine early on, and is probably not the end of the world as you get older, but at a certain point, you need to clean up your finances and start making responsible money choices. Here are 52 money mistakes you need to stop making.</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/man_piggy_bank_000072626017.jpg" width="605" height="340" alt="" /></p> <p><a href="http://www.wisebread.com/20-money-mistakes-everyone-makes-but-no-one-talks-about?ref=fbf">20 Money Mistakes Everyone Makes But No One Talks About</a> &mdash; We all make money mistakes. We forget to budget, we underestimate tax bills sometimes, or go broke from a pricey college education. But the key to recovery is acknowledging the problem, so start talking about these rarely talked about money mistakes, and you'll be on your way to fixing them.</p> <p><a href="http://www.wisebread.com/5-money-mistakes-to-stop-making-by-50?ref=fbf">5 Money Mistakes to Stop Making by 50</a> &mdash; Being reckless with your finances close to retirement age is not a good look. So start putting those irresponsible money moves behind you so you don't reach age 50 lost in a sea of debt.</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/woman_piggy_bank_000035836870.jpg" width="605" height="340" alt="" /></p> <p><a href="http://www.wisebread.com/8-savings-mistakes-even-smart-people-make?ref=fbf">8 Savings Mistakes Even Smart People Make</a> &mdash; You think smart people are immune to poor money choices? Nope! Intelligence helps you manage your money, but it doesn't mean you won't screw up. And there's something oddly comforting about knowing the smartest among us struggle sometimes.</p> <p><a href="http://www.wisebread.com/5-dumb-401k-mistakes-smart-people-make?ref=fbf">5 Dumb 401(k) Mistakes Smart People Make</a> &mdash; Ok, so you've got a 401(k). That's great! But just having one isn't enough. Make sure you aren't making these mistakes &mdash; that even smart people make &mdash; because you could be destroying your retirement.</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/finances-135546859.jpg" width="605" height="340" alt="" /></p> <p><a href="http://www.wisebread.com/the-7-worst-money-mistakes-married-people-make?ref=fbf">The 7 Worst Money Mistakes Married People Make</a> &mdash; Once you recite those vows and become a married pair, you should probably get your money in check. You're a team now, and you shouldn't avoid those tough financial conversations, or hide major purchases from each other.</p> <p><a href="http://www.wisebread.com/stop-making-these-7-basic-budget-mistakes?ref=fbf">Stop Making These 7 Basic Budget Mistakes</a> &mdash; The work that goes into maintaining a budget is never done. You constantly need to adjust your goals to align with your financial needs. But please stop making these basic budget mistakes. You're only hurting yourself.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/chrissa-hardy">Chrissa Hardy</a> of <a href="http://www.wisebread.com/flashback-friday-52-money-mistakes-you-need-to-stop-making">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/flashback-friday-52-ways-to-keep-your-finances-fit-during-the-holidays">Flashback Friday: 52 Ways to Keep Your Finances Fit During the Holidays</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/flashback-friday-44-ways-to-effectively-resist-impulse-buys">Flashback Friday: 44 Ways to Effectively Resist Impulse Buys</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/flashback-friday-51-ways-to-organize-your-whole-life-in-2017">Flashback Friday: 51 Ways to Organize Your Whole Life in 2017</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/flashback-friday-38-money-lessons-we-can-learn-from-celebrities">Flashback Friday: 38 Money Lessons We Can Learn From Celebrities</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-same-actions-will-produce-the-same-results-ten-tenets-for-arranging-your-rich-part-2">The Same Actions Will Produce The Same Results (Ten Tenets for Arranging Your Rich: Part 2)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Budgeting credit fbf flashback friday money money mistakes Fri, 07 Apr 2017 08:30:16 +0000 Chrissa Hardy 1923221 at http://www.wisebread.com Ask the Readers: What Has Been Your Biggest Money Mistake? http://www.wisebread.com/ask-the-readers-what-has-been-your-biggest-money-mistake <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/ask-the-readers-what-has-been-your-biggest-money-mistake" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_sad_piggybank_171303399.jpg" alt="Woman remembering her biggest money mistake" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p><em>Editor's Note: Congratulations to Vickie, Courtney, and Natasha for winning this week's contest!</em></p> <p>We make mistakes all the time &mdash; we're human, after all. The best that we can do is to recognize the mistake, learn from it, and move on. This is especially true if the mistake involves money, as money (or the lack of it) can affect so many aspects of your life.</p> <p><strong>What has been your biggest money mistake?</strong> How did you recover from the mistake? What do you think you could have done differently?</p> <p>Tell us about your biggest money mistake and we'll enter you in a drawing to win a $20 Amazon Gift Card!</p> <h2>Win 1 of 3 $20 Amazon Gift Cards</h2> <p>We're doing three giveaways &mdash; here's how you can win:</p> <ul> <li>Tweet about our giveaway for an entry.</li> <li>Visit our Facebook page for an entry.</li> </ul> <p>Use our Rafflecopter widget for your chance to win one of three Amazon Gift Cards:</p> <p><a class="rcptr" href="http://www.rafflecopter.com/rafl/display/79857dfa293/" rel="nofollow" data-raflid="79857dfa293" data-theme="classic" data-template="" id="rcwidget_xiw4ggct">a Rafflecopter giveaway</a> </p> <script src="https://widget-prime.rafflecopter.com/launch.js"></script></p> <h4>Giveaway Rules:</h4> <ul> <li>Contest ends Monday, April 10 at 11:59 p.m. Pacific. Winners will be announced after April 10 on the original post. Winners will also be contacted via email.<br /> &nbsp;</li> <li>This promotion is in no way sponsored, endorsed or administered, or associated with Facebook or Twitter.<br /> &nbsp;</li> <li>You must be 18 and U.S. resident to enter. Void where prohibited.</li> </ul> <p><strong>Good Luck!</strong></p> <div class="field field-type-text field-field-blog-teaser"> <div class="field-items"> <div class="field-item odd"> Tell us about your biggest money mistake and we&#039;ll enter you in a drawing to win a $20 Amazon Gift Card! </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-jacobs">Ashley Jacobs</a> of <a href="http://www.wisebread.com/ask-the-readers-what-has-been-your-biggest-money-mistake">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-the-readers-is-now-the-time-to-shop">Ask the Readers: Is Now the Time to Shop?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-common-budget-mistakes-you-can-fix-right-now">5 Common Budget Mistakes You Can Fix Right Now</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-negotiating-skills-everyone-should-master">8 Negotiating Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-critical-money-mistakes-people-make-in-their-40s">7 Critical Money Mistakes People Make in Their 40s</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-your-smartphone-saves-you-money">8 Ways Your Smartphone Saves You Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Giveaways Ask the Readers money money mistakes piggy bank saving money Tue, 04 Apr 2017 08:30:15 +0000 Ashley Jacobs 1919580 at http://www.wisebread.com It's Never Too Late to Fix These 5 Money Mistakes From Your Past http://www.wisebread.com/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-637362030.jpg" alt="Fixing money mistakes from his past" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Making mistakes is part of life, and this is particularly true when it comes to finance. Since money is such a taboo topic in our culture, we often have to learn good money behavior through trial and error.</p> <p>The problem is that our culture also considers errors as something to regret, rather than opportunities to learn. This can land us in a shame-filled cycle of inaction.</p> <p>Forgiving yourself for financial mistakes is not the same as condoning or ignoring them. It's simply giving yourself the opportunity to move on from the past. Stop beating yourself up over these common youthful money mistakes and take action to fix them instead.</p> <h2>1. Taking on too much student debt</h2> <p>Taking out a student loan has become the default method for the majority of college students to pay for their education. According to a 2016 Market Watch report, &quot;about <a href="http://www.marketwatch.com/story/americas-growing-student-loan-debt-crisis-2016-01-15" target="_blank">40 million Americans</a> hold student loans and about 70 percent of bachelor's degree recipients graduate with debt.&quot;</p> <p>With the near ubiquity of student loans, however, comes the problem of students taking on more debt than they need or can comfortably pay off once they graduate. Student loans can feel like an easy way to pay for more school than you can afford, or even a way to fund things you don't <em>really </em>need, like your own apartment or spring break vacations.</p> <p>This can be exacerbated by the fact that college students and their parents don't always completely understand the differences between types of student loans, which can leave them all the more susceptible to overwhelming debt.</p> <h3>How to fix it</h3> <p>If you are kicking yourself for running up a student loan tab that you can't afford, start your journey to self-forgiveness by investigating your repayment options. The first step is to call your lender and explain the situation. If you have federal student loans, you may be eligible for a <a href="http://www.wisebread.com/which-student-loan-repayment-plan-saves-you-the-most?ref=internal" target="_blank">modification of your repayment plan</a> based on your income. Even if you have private loans, talking with your lender can let you know what <a href="http://www.wisebread.com/3-things-you-must-know-about-repaying-your-private-student-loans?ref=internal" target="_blank">options are available</a> that will give you more breathing room.</p> <p>Once you have made whatever changes you can to your repayment plan, then take the time to write down everything you got for the money you borrowed. For instance, in addition to your education, you might list the friends and connections you made at college, the experiences you had, the insights you gained about yourself and your area of study, and the way the loans allowed you to focus on college instead of tuition.</p> <p>This exercise will give you a chance to feel gratitude for the loans. You are now the beneficiary of your younger self's choices &mdash; both the good and the bad. Recognizing all of the benefits you got from your student loans will help you move from being angry at yourself, to looking at your current loan payments as a gift to your younger self.</p> <h2>2. Not budgeting or building an emergency fund</h2> <p>I don't know a single person who did not immediately begin spending money hand over fist after landing their first well-paid job. That means anything from immediately purchasing an expensive car to relying on restaurants for meals rather than cooking. Even people who carefully budget their money when working for low salaries have a tendency to start making it rain as soon as their paychecks get bigger.</p> <p>This can cause problems in two ways. Sometimes, the good salary doesn't last forever because of a layoff or other change in your financial circumstances. And sometimes, you keep making good money, but your lifestyle continues to inflate &mdash; which means you can never seem to get ahead.</p> <p>In either case, the lack of a budget and an <a href="http://www.wisebread.com/a-step-by-step-guide-to-creating-your-emergency-fund?ref=internal" target="_blank">emergency fund</a> means that a financial blow can turn into a crisis, leaving you cursing yourself for every unnecessary purchase you made when the money was good.</p> <h3>How to fix it</h3> <p>Budgeting may be the last thing on your mind when the lack of money hits the fan, but <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps?ref=internal" target="_blank">creating a budget</a> is exactly what you need to do in an emergency. Don't waste your time beating yourself up for the spending choices you made before the financial crisis &mdash; just sit down with your bank statements, credit card accounts, and bills, and figure out your income and outflow. Learning to budget in the middle of a crisis might be painful, but it will ultimately help you feel in control of your money.</p> <p>Once you have a budget system in place, it's time to start looking back on your spending habits. What did you buy that you now regret? Why do you regret it? Do you feel regret now only because an emergency came up and you didn't have the funds, or do you actually feel the purchase itself added nothing to your life? If you truly regret the purchase, why did you make it?</p> <p>It can hurt to ask yourself these questions, which is why it is important to regard your past purchases with curiosity and compassion, rather than guilt or anger at yourself. But once you have answered these questions, you will have a better understanding of why you made those unnecessary purchases &mdash; which will help you avoid the same spending traps in the future. Understanding the reasons behind your bad money habits can help you develop financial mindfulness to make better choices going forward.</p> <h2>3. Not saving for retirement</h2> <p>Most people don't think to start <a href="http://www.wisebread.com/10-signs-you-arent-saving-enough-for-retirement?ref=internal" target="_blank">putting money aside for retirement</a> when they are young. In your 20s and 30s, not only does retirement seem too far away to worry about, but you've got plenty of competing needs that seem more important.</p> <p>Of course, if you read <em>any </em>advice on retirement, it's clear that saving as much money as you can when you are young is the best route to a secure retirement. Unfortunately, this advice can feel like it's meant to shame anyone who didn't start funding their 401(k) on the day they started their first job. That's not helpful to late funders.</p> <h3>How to fix it</h3> <p>When it comes to retirement, we should all save early and save often. Unfortunately, financial advice tends to beat the &quot;save early&quot; drum so much that it's easy to believe that there is such a thing as &quot;too old to start saving for retirement.&quot; But as long as you are bringing in an income, you can save for your retirement. Write down your future goals and your vision of retirement, so you can get excited about saving. Then you can let go of the anger at your younger self, and start putting money in your retirement accounts today, tomorrow, and beyond. (See also: <a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make?ref=seealso" target="_blank">7 Retirement Planning Steps Late Starters Must Make</a>)</p> <h2>4. Racking up credit card debt</h2> <p>I got my first credit card in college. Though I tried to pay off the bill every month, it got away from me pretty quickly. Sometime in my senior year of college, when I realized that there was no way I could pay off my bill, I made the decision to just let the debt rack up, since I'd have a good-paying job after graduation and could take care of it then.</p> <p>Of course, after I graduated, I was unable to find a job for about three months, and the first job I did land was working retail for $8.25 an hour. My credit card debt crept up even more.</p> <p>My youthful problems with credit card debt are incredibly common. When you get your first sweet taste of credit, it's pretty hard to stop using the plastic even when your budget can't handle your charges. The fact that you're not required to pay off the cringe-inducing full amount allows you to assume the problem will take care of itself, as I did.</p> <p>Then, one day, you realize that you are in debt up to your eyeballs with nothing to show for it, and you are kicking yourself for your youthful credit card spending.</p> <h3>How to fix it</h3> <p>Start by recognizing the fact that humans are not wired to be able to handle the combination of instant gratification plus delayed payment. Young adults are particularly susceptible to this, which is the very reason why credit card companies have been banned from college campuses.</p> <p>Once you recognize this, it becomes much easier to start digging yourself out of the hole. You can much more easily leave your credit cards at home and remove them from your favorite e-tailer sites when you realize the cost of their convenience. Sending extra money to your credit card each month also starts feeling like steps toward freedom. (See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=seealso" target="_blank">5 Ways to Pay Off High Interest Credit Card Debt</a>)</p> <h2>5. Buying too much car</h2> <p>Buying a new car for yourself can be one of the most satisfying moments in young adulthood. You can finally choose the car <em>you</em> want to drive, rather than making do with a beater or your parents' minivan. So it's very easy to go hog-wild when you're in a position to buy a new car. You can get the horsepower, or the luxury, or the bells-and-whistles you've always dreamed of having.</p> <p>But the monthly payments end up being a bigger deal than they seemed when you were in the showroom, and your high-end car keeps needing expensive maintenance and insurance. When you realize how much you could have saved if you opted for that reliable low-key sedan instead, you want to kick your younger, flashy self.</p> <h3>How to fix it</h3> <p>Once you have forgiven yourself for putting too much emphasis (and money) on your car, you can start thinking more rationally about your transportation needs. If your vehicle is just a means to get from point A to point B, then what do you really need from it? What's the minimum that would be acceptable for your transportation?</p> <p>Going through this thought exercise allows you to think about what you really need, and will help you do the research necessary to find the right car for your life. Then you can trade in your too-much car for something more appropriate, or drive something that meets your barest of needs until you have paid off the mistake of buying too much car.</p> <p>And don't forget &mdash; you can always put some racing stripes on &ldquo;Old Reliable&rdquo; if you want it to represent you. Loving your car doesn't have to be expensive.</p> <h2>Let it go</h2> <p>Feeling shame over things you did in the past is a way of letting your mistakes continue to hurt you. Yes, you may have screwed up when you were younger and it might be hurting your bottom line right now. But you give that old mistake far more power over your future if you continue to beat yourself up for it instead of simply accepting it and doing what you can to bounce back from it. Step out of regret and into action today.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-expect-after-these-5-personal-financial-disasters">What to Expect After These 5 Personal Financial Disasters</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-resolutions-anyone-can-master">8 Personal Finance Resolutions Anyone Can Master</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/your-good-credit-doesnt-mean-you-have-good-money-habits">Your Good Credit Doesn&#039;t Mean You Have Good Money Habits</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-moves-to-make-before-moving-out-on-your-own">5 Money Moves to Make Before Moving Out on Your Own</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-new-year-budget-resolutions-you-should-make-now">4 New Year Budget Resolutions You Should Make Now</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance budgeting debt emergency funds forgiveness missteps money mistakes retirement savings student loans young youth Fri, 31 Mar 2017 09:00:15 +0000 Emily Guy Birken 1918286 at http://www.wisebread.com 5 Costly Credit Card Mistakes You Might Be Making http://www.wisebread.com/5-costly-credit-card-mistakes-you-might-be-making <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-costly-credit-card-mistakes-you-might-be-making" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-623942818.jpg" alt="Man making costly credit card mistakes" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>While most Americans have one or more credit cards, very few spend much time thinking about them. Instead, we tend to enjoy the simplicity and convenience of our cards, while often failing to use them to our best advantage.</p> <p>Here are five ways you may be using your credit cards wrong, and some tips on how to use them better.</p> <h2>1. Carrying a Balance</h2> <p>If you're carrying a balance on one or more of your credit cards, you're incurring costly interest charges on every purchase you make, starting on the day of each transaction. However, if you can get into the habit of clearing your balance every month, then you will enjoy an <a href="http://www.wisebread.com/everything-you-didn-t-understand-about-credit-card-interest-grace-periods-and-penalty-aprs?ref=internal" target="_blank">interest-free grace period</a>.</p> <p>Credit card issuers calculate interest charges based on your average daily balance, but they will waive all interest charges when you pay your entire statement balance in full every month. As a result, you can make a purchase at the beginning of your 30-day billing period, and then pay for it at the end of a 25-day grace period (the time between when the statement period ends and the payment due date), and get up to 55 days of interest-free financing.</p> <h2>2. Not Carrying a Balance, But Not Earning Rewards Either<strong> </strong></h2> <p>About 30% of U.S. card accounts don't incur interest charges because the cardholders pay their credit card balances in full every month. That's great, but too many of these cardholders aren't earning any rewards. When you pay your full statement balance each month, you can choose a card that offers the most valuable rewards, without worrying about its interest rate. (See also: <a href="http://www.wisebread.com/best-credit-cards-for-everyday-purchases?ref=seealso" target="_blank">Best Credit Cards for Everyday Purchases</a>)</p> <p>And since you won't have any credit card debt, you may have a very strong credit score. An excellent credit score <a href="http://www.wisebread.com/5-best-credit-cards-for-people-with-excellent-credit?ref=internal" target="_blank">qualifies you for the best cards</a> that offer rewards programs and <a href="http://www.wisebread.com/5-best-credit-cards-that-offer-bonus-cash-for-sign-up" target="_blank">high sign-up bonuses</a>.</p> <h2>3. Not Redeeming Your Credit Card Rewards</h2> <p>It's not enough to just earn credit card rewards, you need to redeem them. According to the 2015 J.D. Power credit card satisfaction survey, only 53% of reward card holders had redeemed rewards in the previous six months. There may be good reasons to hold onto rewards &mdash; if you're saving up airline points for a big trip, for example. But airline rewards programs are changing constantly, and the devaluation of frequent flyer miles is always a risk. Even worse, the rewards may expire or you may forget about them before the account is closed.</p> <p>People often don't use rewards because the reward program is too complicated or they've chosen the wrong kind of reward card. While <a href="http://www.wisebread.com/top-5-travel-reward-credit-cards?ref=internal" target="_blank">travel reward cards</a> often sound alluring and a free international trip usually provides the <a href="http://www.wisebread.com/which-credit-cards-have-the-best-travel-redemption-value?ref=internal" target="_blank">highest rewards redemption value</a>, the truth is, if you don't travel more than a couple of times a year or you're not interested in an overseas trip, they're probably not your best option.</p> <p><a href="http://www.wisebread.com/5-best-cash-back-credit-cards?ref=internal" target="_blank">Cash-back cards</a> offer a slightly lower payout but they're simpler, so most people are more likely to use the rewards. (See also: <a href="http://www.wisebread.com/cash-back-vs-travel-rewards-pick-the-right-credit-card-for-you?ref=seealso" target="_blank">Cash Back vs Travel Rewards: Pick the Right Credit Card for You</a>)</p> <h2>4. Having Just One Credit Card<strong> </strong></h2> <p>As long as you can handle credit responsibly, you're better off having more than one credit card. Some cards are better than others for certain purposes. You might have one credit card that offers valuable benefits when you travel, and another card that earns the most rewards for everyday purchases at home, such as <a href="http://www.wisebread.com/the-best-5-credit-cards-for-groceries?ref=internal" target="_blank">groceries</a> or <a href="http://www.wisebread.com/5-best-gas-rewards-credit-cards?ref=internal" target="_blank">gas</a>.</p> <p>Having multiple credit cards improves your overall <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit utilization ratio</a>, helping your credit score. It's also important to have a backup in case one of your cards is ever lost, stolen, or hacked.</p> <h2>5. Not Using Your Cardholder Benefits<strong> </strong></h2> <p>When you first received your credit card, it included pages of fine print that you probably threw away. Buried in that pile was something called the guide to benefits that lists all sorts of ways that you can use your card to save money. (See also: <a href="http://www.wisebread.com/10-awesome-credit-card-perks-you-didnt-know-about?ref=seealso" target="_blank">Awesome Credit Card Perks You Didn't Know About</a>)</p> <p>One of the best known credit card benefits is <a href="http://www.wisebread.com/what-does-car-rental-insurance-really-cover-on-your-credit-card?ref=internal" target="_blank">rental car insurance</a>, which saves you from having to buy the expensive policies pushed by the car rental companies. Lesser known perks include <a href="http://www.wisebread.com/how-free-extended-warranties-work-on-credit-cards?ref=internal" target="_blank">extended warranty</a> coverage, <a href="http://www.wisebread.com/how-credit-cards-protect-your-purchases-from-damage-or-theft?ref=internal" target="_blank">damage and theft protection</a>, and even a <a href="http://www.wisebread.com/how-to-get-a-price-match-through-your-credit-card?ref=internal" target="_blank">price match policy</a>. And when you are traveling, your credit card could come in handy with <a href="http://www.wisebread.com/what-exactly-does-travel-accident-insurance-cover-on-credit-cards?ref=internal" target="_blank">travel accident insurance</a>, trip delay and trip interruption coverage, a lost baggage benefit, and trip cancellation insurance. (See also: <a href="http://www.wisebread.com/travel-perks-you-didnt-know-your-credit-card-had?ref=seealso" target="_blank">Travel Perks You Didn't Know Your Credit Card Has</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-costly-credit-card-mistakes-you-might-be-making&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%20Costly%20Credit%20Card%20Mistakes%20You%20Might%20Be%20Making_0.jpg&amp;description=5%20Costly%20Credit%20Card%20Mistakes%20You%20Might%20Be%20Making" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></p> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Costly%20Credit%20Card%20Mistakes%20You%20Might%20Be%20Making_0.jpg" alt="5 Costly Credit Card Mistakes You Might Be Making" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/5-costly-credit-card-mistakes-you-might-be-making">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-credit-card-mistakes-that-could-be-ruining-your-credit">6 Credit Card Mistakes That Could Be Ruining Your Credit</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-make-retail-therapy-good-for-you">5 Ways to Make Retail Therapy Good for You</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/avoid-these-6-mistakes-newbies-make-with-their-first-credit-cards">Avoid These 6 Mistakes Newbies Make With Their First Credit Cards</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/25-bite-sized-money-resolutions-to-make-2015-your-biggest-year-yet">25 Bite-Sized Money Resolutions to Make 2015 Your Biggest Year Yet</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-reliving-past-money-mistakes-hurts-your-financial-future">How Reliving Past Money Mistakes Hurts Your Financial Future</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards bad habits credit mistakes money habits money mistakes Thu, 23 Feb 2017 10:30:26 +0000 Jason Steele 1894199 at http://www.wisebread.com 6 Credit Card Mistakes That Could Be Ruining Your Credit http://www.wisebread.com/6-credit-card-mistakes-that-could-be-ruining-your-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-credit-card-mistakes-that-could-be-ruining-your-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-585795908.jpg" alt="Woman learning credit card mistakes that could be ruining her credit" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>It's difficult to overstate how important your credit record and credit score are. Not only will <a href="http://www.wisebread.com/what-is-a-good-credit-score-range?ref=internal" target="_blank">good credit</a> enable you be approved for the <a href="http://www.wisebread.com/5-best-credit-cards-for-people-with-excellent-credit?ref=internal" target="_blank">most attractive credit cards</a>, it's vital for receiving the lowest rates on a car loan, a mortgage, and on home and auto insurance premiums. It can even make the difference in whether you get the apartment or job you want, since both landlords and employers often run credit checks on applicants. (See also: <a href="http://www.wisebread.com/15-surprising-ways-bad-credit-can-hurt-you?ref=seealso" target="_blank">15 Surprising Ways Bad Credit Can Hurt You</a>)</p> <p>Unfortunately, many credit card users are making big mistakes that are ruining their credit. Since it can take years for some of the most negative items to drop off your credit report, it's crucial to avoid making these mistakes in the first place. Here are six credit card mistakes that could be ruining your credit.</p> <h2>1. Paying Late<strong> </strong></h2> <p>The most important factor in your FICO score &mdash; the most popular credit score lenders use to evaluate you &mdash; is your payment history. It makes up 35% of your score. (See also: <a href="http://www.wisebread.com/the-5-things-with-the-biggest-impact-on-your-credit-score?ref=seealso" target="_blank">5 Things with the Biggest Impact on Your Credit Score</a>)</p> <p>If you are using a credit card, your first priority should be to <em>always </em>pay your credit card bill on time. While one bill paid a few days late won't cause lasting damage to your credit score, paying late frequently will hurt more. On top of that you'll usually be subject to late fees.</p> <p>Thankfully, there are many tools to help you pay on time. Most credit card issuers offer automatic payments to ensure that you never pay late. You can also request a specific payment due date so you can arrange all your bills to be due at the same time each month. That way you can sit down and pay bills just once a month rather than keeping track of various bills as they come in. Additionally, you can sign up for payment reminders by email or text.</p> <h2>2. Paying Less Than the Minimum<strong> </strong></h2> <p>Paying just the minimum payment on your credit cards will <a href="http://www.wisebread.com/all-the-ways-minimum-payments-are-evil?ref=internal" target="_blank">hurt you financially</a>, but paying below that is even worse &mdash; much worse.</p> <p>To avoid being considered delinquent on a credit card account, you not only have to make your payments on time, but the payments must be <em>at least </em>the minimum amount required, which is stated on your bill. If your payment is below the minimum, it doesn't matter if it was on time. The payment will still be considered late, causing a hit to your credit score.</p> <h2>3. Failing to Pay<strong> </strong></h2> <p>Miss a payment for at least 60 days and your creditors start wondering if you're going to pay at all. That's why you'll start to see more serious consequences than a single lapse of a few days would cause. After two missed billing cycles an issuer can impose a high <a href="http://www.wisebread.com/everything-you-didn-t-understand-about-credit-card-interest-grace-periods-and-penalty-aprs?ref=internal" target="_blank">penalty interest rate</a> on the account, on top of late fees. And while those charges alone are costly, your credit will also start to really suffer.</p> <p>A payment that's 90 days overdue is extremely damaging to your credit score and takes seven years to fall off your credit record. At 120 days late, your debt will likely be <a href="http://www.wisebread.com/what-happens-when-your-credit-card-debt-is-charged-off?ref=internal" target="_blank">charged off</a> and sold to collectors, which harms your credit score even more. (See also: <a href="http://www.wisebread.com/heres-what-to-do-if-you-cant-pay-your-bills-on-time?ref=seealso" target="_blank">What to Do If You Can't Pay Your Bills on Time</a>)</p> <p>If you are unable to pay your credit card bill for any reason, you should reach out to your card issuer to let them know. You may be able to <a href="http://www.wisebread.com/4-ways-to-negotiate-credit-card-debt" target="_blank">negotiate a debt repayment plan</a>.</p> <h2>4. Having High Balances<strong> </strong></h2> <p>After payment history, the second most important factor in your credit score is how much you owe. It accounts for 30% of your FICO score. Maxing out your credit cards, or coming close to it, hurts your credit score.</p> <p>Ideally you want your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit utilization ratio</a> &mdash; the amount of debt you have divided by your total available credit &mdash; to be below 30%. The lower you can get it, the better off your credit score will be. The best way to lower it is to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">pay off your balances quickly</a>. (See also: <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off" target="_blank">5-Day Debt Reduction Plan: Pay It Off</a>)</p> <h2>5. Not Having Enough Credit Cards<strong> </strong></h2> <p>The other way to lower your credit utilization ratio is to increase the amount of available credit you have. If you have just one or two credit cards, and you are using up most of the credit lines available on them, you may benefit from having another card &mdash; but only if you can resist the temptation to ring up a bunch more debt on it. Remember, raising your credit line only to add more debt will drop your credit score.</p> <p>Pick a basic, <a href="http://www.wisebread.com/the-5-best-credit-cards-with-no-annual-fees?ref=internal" target="_blank">no-annual-fee card</a> and then use it once a month or so for a small purchase, such as a tank of gas, that you can pay off immediately. That will keep the account active without putting you in debt. (See also: <a href="http://www.wisebread.com/ask-these-7-questions-to-help-choose-the-perfect-credit-card?ref=seealso" target="_blank">7 Questions to Ask to Help Choose the Perfect Credit Card</a>)</p> <p>Similarly, you could request a credit line increase for the accounts you already have. If you've been paying on time, chances are you can get a credit limit increase by simply calling your issuer and asking.</p> <p>Just be aware that credit card issuers will pull your credit report before approving you for a new credit card, and usually for a credit line increase, too. This will result in a hard pull on your credit, which will ding your credit score. Even a few points could be important if you're about to apply for a mortgage, so wait to ask for new credit until after you've done that.</p> <h2>6. Canceling Your Oldest Credit Cards<strong> </strong></h2> <p>Closing any credit card will raise your credit utilization ratio, but closing your oldest accounts harms a different part of your credit score. Your length of credit history accounts for 15% of your FICO score. While an account in good standing will remain on your credit report for about 10 years after you've closed it, it will eventually be removed and hurt your score. (See also: <a href="http://www.wisebread.com/5-times-its-okay-to-close-a-credit-card?ref=seealso" target="_blank">5 Times It's Okay to Close a Credit Card</a>)</p> <p>If you don't need to use a card, it may be better to put the card in a secure location, but keep the account open. If the account has an annual fee, you can ask to have the fee waived, or the account changed to a different card without the annual fee.</p> <p>Don't let these credit card mistakes ruin your credit. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!&nbsp;</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-credit-card-mistakes-that-could-be-ruining-your-credit&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%20Credit%20Card%20Mistakes%20That%20Could%20Be%20Ruining%20Your%20Credit_0.jpg&amp;description=6%20Credit%20Card%20Mistakes%20That%20Could%20Be%20Ruining%20Your%20Credit" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></p> <p style="text-align: center;">&nbsp;<img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Credit%20Card%20Mistakes%20That%20Could%20Be%20Ruining%20Your%20Credit_0.jpg" alt="6 Credit Card Mistakes That Could Be Ruining Your Credit" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/6-credit-card-mistakes-that-could-be-ruining-your-credit">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/need-a-game-to-learn-to-manage-your-credit">Need a game to learn to manage your credit?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">How to Rebuild Your Credit in 8 Simple Steps</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score">How to Use Credit Cards to Improve Your Credit Score</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-life-is-amazing-with-an-800-credit-score">5 Ways Life Is Amazing With an 800 Credit Score</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-avoid-getting-your-credit-card-canceled">How to Avoid Getting Your Credit Card Canceled</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards budgets credit credit rating credit report credit score money mistakes Tue, 21 Feb 2017 10:31:29 +0000 Jason Steele 1892848 at http://www.wisebread.com Best Money Tips: Big Money Mistakes That Married Couples Make http://www.wisebread.com/best-money-tips-big-money-mistakes-that-married-couples-make <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-big-money-mistakes-that-married-couples-make" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/married_couple_money_174495001.jpg" alt="Married couple making big money mistakes" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found articles on big money mistakes that married couples make, travel discounts you may have missed, and helpful tips for flying with gifts.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.savethebills.com/4-big-money-mistakes-married-couples-make/">4 Big Money Mistakes Married Couples Make</a> &mdash; Even if you decide to keep separate bank accounts, it's important to also have a joint account for shared expenses like utilities and mortgage payments. [Save The Bills]</p> <p><a href="http://www.morewithlesstoday.com/5-travel-discounts-you-may-be-missing-out-on/">5 Travel Discounts You May Be Missing Out On</a> &mdash; Most car rental companies allow you to cancel and rebook without penalty, which means you an take advantage of price drops even after you have booked a rental car. [More With Less Today]</p> <p><a href="http://www.popsugar.com/smart-living/Tips-Flying-Gifts-42822462">11 Helpful Tips For Flying With Gifts</a> &mdash; Gifts will get jostled and potentially damaged if packed in a soft bag, especially if the bag is being checked. A hard shell case offers more protection. [PopSugar Smart Living]</p> <p><a href="http://www.moneytalksnews.com/missed-hbos-westworld-heres-how-watch-along-with-everything-hbo-free/">Missed HBO&rsquo;s &lsquo;Westworld&rsquo;? Here&rsquo;s How to Watch it, Along With Everything on HBO, Free</a> &mdash; Amazon has a new free trial offer that allows you to stream HBO shows without paying a dime. [Money Talks News]</p> <p><a href="http://www.csmonitor.com/Business/Saving-Money/2016/1208/People-tell-us-the-most-thoughtful-DIY-gifts-they-ve-given-or-received">People tell us the most thoughtful DIY gifts they've given or received</a> &mdash; Thoughtful gifts may require some brainstorming, creativity, and maybe some extra time, but they're well worth the effort! Check out these ideas for some inspiration. [The Monitor]</p> <h2>Other Essential Reading</h2> <p><a href="http://www.thepennyhoarder.com/books-ways-to-make-money/">Love Books? Here&rsquo;s 6 Ways to Make Money Off of Them &mdash; So You Can Buy More</a> &mdash; You can become a proofreader on the side and earn about 35 cents per page. [The Penny Hoarder]</p> <p><a href="https://www.savingfreak.com/discount-cheap-razors-shaving/">5 Ways to Save Money on Shaving &ndash; Cheap Razors are Just the Start</a> &mdash; It only takes a few extra steps in your daily routine to make your razor last months longer. [Saving Freak]</p> <p><a href="http://want2discover.com/ways-develop-magnetic-personality/">8 Magic Ways To Develop a Charismatic Personality</a> &mdash; Charismatic people give off an energetic and enthusiastic vibe. This is something you can develop by looking for the positive things in life and making an effort to spread cheerfulness. [Want 2 Discover]</p> <p><a href="http://productivitytheory.com/set-these-5-holiday-goals-to-fight-stress-and-depression/">5 Holiday Goals To Fight Stress And Depression</a> &mdash; It's easy to forget about your health when you're rushing through the season. Make it a goal to do some light exercise and alleviate some holiday stress. [Productivity Theory]</p> <p><a href="https://www.lupgrade.com/shut-uncomfortable-conversations-office/">How To Shut Down Uncomfortable Conversations At The Office</a> &mdash; There are three magic phrases that will help you shake off any nasty conversation at the office. [Life Upgrade]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="http://www.wisebread.com/best-money-tips-big-money-mistakes-that-married-couples-make">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-simple-ways-to-split-bills-with-your-spouse">3 Simple Ways to Split Bills With Your Spouse</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/does-divorce-affect-your-student-loans">Does Divorce Affect Your Student Loans?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-protect-yourself-financially-during-a-divorce-or-separation">How to Protect Yourself Financially During a Divorce or Separation</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-secrets-you-need-to-tell-your-financial-adviser">11 Secrets You Need to Tell Your Financial Adviser</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past">It&#039;s Never Too Late to Fix These 5 Money Mistakes From Your Past</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance best money tips marriage money mistakes Mon, 12 Dec 2016 11:00:13 +0000 Amy Lu 1851183 at http://www.wisebread.com Best Money Tips: 10 Ways to Screw Up Your Finances http://www.wisebread.com/best-money-tips-10-ways-to-screw-up-your-finances <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-10-ways-to-screw-up-your-finances" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_stressed_computer_80116555.jpg" alt="Woman stressed out after screwing up her finances" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found articles on easy ways to screw up your finances, how to read more books, and tips for first-time property investors.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.biblemoneymatters.com/10-common-personal-finance-mistakes/">10 Ways To Screw Up Your Finances Without Even Trying: Common Personal Finance Mistakes</a> &mdash; You'll be in debt and paying interest forever if you always finance large purchases. [Bible Money Matters]</p> <p><a href="https://www.scotthyoung.com/blog/2016/06/21/how-to-read-more-books/">How to Read More Books</a> &mdash; Have both ambitions and fun books on your reading list. Challenging books help you grow, but light, easy reads help you relax. [Scott H. Young]</p> <p><a href="http://www.dinksfinance.com/2016/06/tips-for-first-time-property-investments/">Tips for First Time Property Investments</a> &mdash; Have a few years&rsquo; experience with regular real estate investing before you try your hand at foreclosures and short sales. [Dinks Finance]</p> <p><a href="http://www.dumblittleman.com/2016/06/ways-to-eat-breakfast.html">5 New Ways To Eat Breakfast And Skip Mid-Morning Slump</a> &mdash; Start your day with a shot of vitamin C and fiber! Make a breakfast of tomato slices sprinkled with seasoning and cheese and cooked in the broiler. [Dumb Little Man]</p> <p><a href="http://www.popsugar.com/smart-living/Tips-Workaholics-40471576">10 Ways Workaholics Can Chill Out and Work Less</a> &mdash; Find a hobby to do when you get home so that you're not just working, eating, and sleeping. [PopSugar Smart Living]</p> <h2>Other Essential Reading</h2> <p><a href="https://www.listenmoneymatters.com/managing-you-family-like-a-business/">Manage Your Family Like a Business</a> &mdash; Applying business principles to your family finances can help maximize your wealth. [Listen Money Matters]</p> <p><a href="http://www.cheapism.com/blog/picnic-food-that-spoils-13923/">10 Fast-Spoiling Foods to Avoid Serving at Summer Picnics</a> &mdash; Serving fresh fruit outdoors? Store it in a cool and shady place. One spoiled piece of fruit can ruin the whole bunch. [Cheapism]</p> <p><a href="http://www.adebtfreestressfreelife.com/tough-house-cleaning-jobs/">3 Brilliant Tips To Tackle Tough House Cleaning Jobs</a> &mdash; After cleaning your shower doors, treat them with a water-repellent product like Rain-X, which causes water and soap to bead up and run off the glass. [A Debt Free Mess Free Life]</p> <p><a href="http://www.cultofmoney.com/2016/06/22/strict-budgeting-doesnt-work-instead/">Why Strict Budgeting Doesn&rsquo;t Work (And What to Do Instead)</a> &mdash; There are psychological reasons why strict budgeting doesn't work. Getting your finances into shape becomes much easier when you actually enjoy it. [Cult of Money]</p> <p><a href="http://parentingsquad.com/7-ways-to-make-summer-more-fun-for-children-with-special-needs">7 Ways to Make Summer More Fun for Children With Special Needs</a> &mdash; Everyone, including a child with special needs, can have fun with an outdoor sensory table. [Parenting Squad]</p> <p><strong>$1,500 Giveaway!</strong> Don't forget to enter before June 30th for your chance to win $1,500 in prizes in our Rutgers Giveaway! If you are a young adult, take a quick survey on your financial decisions and you could win a $500 or one of five $200 Amazon gift cards. For more information and to enter, check out our <a href="http://www.wisebread.com/rutgers-is-giving-away-1500-to-wise-bread-readers">giveaway article</a>!</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="http://www.wisebread.com/best-money-tips-10-ways-to-screw-up-your-finances">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past">It&#039;s Never Too Late to Fix These 5 Money Mistakes From Your Past</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-critical-money-mistakes-people-make-in-their-40s">7 Critical Money Mistakes People Make in Their 40s</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-money-mistakes-everyone-makes-but-no-one-talks-about">20 Money Mistakes Everyone Makes But No One Talks About</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-mistakes-to-stop-making-by-50">5 Money Mistakes to Stop Making by 50</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-expect-after-these-5-personal-financial-disasters">What to Expect After These 5 Personal Financial Disasters</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance best money tips money mistakes Thu, 23 Jun 2016 10:00:03 +0000 Amy Lu 1736908 at http://www.wisebread.com 6 Ways That Job You Hate Keeps You Poor http://www.wisebread.com/6-ways-that-job-you-hate-keeps-you-poor <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-that-job-you-hate-keeps-you-poor" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_exhausted_work_000063560641.jpg" alt="Woman learning ways the job she hates keeps her poor" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>In the mid-1990s, I accepted a position at a large consulting firm in suburban Chicago. This was only my second &quot;real&quot; job post-college and I was delighted because this single career move bumped up my salary 20%. I realized my mistake quickly. My very first day on that sprawling corporate campus confirmed the place was a terrible fit. I hated every minute of it... two years worth of minutes, to be exact.</p> <p>Looking back, that job may have made my paychecks a little fatter and put a shine on my resume, but it cost me a lot, too. If you find yourself in a similar situation, it might be time to ask if all that misery is actually costing you money.</p> <p>Here are six ways that job you hate just might be keeping you poor.</p> <h2>1. It Keeps You Busy</h2> <p>Even a job you hate has a way of consuming your day. It's nearly impossible to find time to explore higher paying opportunities, invest in your education, network with other professionals, or properly plan for the future. In the end, what keeps you busy can easily keep you stuck. (See also: <a href="http://www.wisebread.com/8-ways-to-take-a-break-at-work-and-still-look-busy">8 Ways to Take a Break at Work and Still Look Busy</a>)</p> <h2>2. It Stresses You Out</h2> <p>Working at jobs we hate can be particularly stressful and exhausting. We often cope by trying to eliminate all other stressors and pursuing a life of absolute convenience. Forget taking public transit to work; drive and pay to park instead. Forget packing your lunch; dine out. Forget housework and yard work; just hire it done. It all adds up to this cold, hard fact: Stress is expensive. (See also: <a href="http://www.wisebread.com/13-cheap-ways-to-beat-stress">13 Cheap Ways to Beat Stress</a>)</p> <h2>3. It Might be Making You Sick</h2> <p>The connection between mental and physical health has been proven time and again. If you're unhappy at work, it affects other parts of your life, including your physical well-being. And (surprise!) being sick is usually bad for your budget.</p> <h2>4. It's a Constant Punishment That Requires a Constant Reward</h2> <p>If you're dragging yourself to a job you hate day after day, you deserve some sort of pay off, right? And the more the job seems like a punishment, the bigger the reward needs to be. A new car, an indulgent vacation, and a bigger house may feel like fair compensation for your efforts. But unchecked, those things can create a <a href="http://www.wisebread.com/the-debt-trap-factors-that-have-led-us-to-our-debt">debt trap</a> that keeps you poor and limits your choices.</p> <h2>5. It Saps Your Motivation</h2> <p>I call it the Who Cares? Syndrome. If you're in a job you hate, it's extremely hard to motivate yourself. Who cares if you get promoted? Who cares if you get a raise? Who cares if you spend too much money? Who cares if you fund your 401K? Without that primary motivator &mdash; being invested in a job you care about and enjoy &mdash; everything else becomes less important. Plans don't get made and all sorts of goals fall by the wayside.</p> <h2>6. It Feeds Your Fear</h2> <p>People stay in jobs they hate for a number of reasons, and I don't want to suggest that everyone has the luxury of choice. But often fear can keep us stuck in negative situations both personally and professionally. Over time, we lose confidence, stop looking for new opportunities, and settle for a life of less. From how we work, to how we love, to how we manage our money &mdash; fear limits our potential.</p> <p>I still remember the afternoon my phone rang with a job offer &mdash; a new job that allowed me to bid a final, enthusiastic farewell to the one I'd detested for two whole years. I think a few joyous expletives were involved... and maybe an air punch. I gave my required two weeks' notice immediately and never looked back. And though there have been the inevitable ups and downs since, moving on enriched my life in more ways than one.</p> <p><em>Have you ever suffered through a job you hated? How did it affect your finances? How did leaving improve things?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/6-ways-that-job-you-hate-keeps-you-poor">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-signs-your-company-is-going-under">10 Signs Your Company Is Going Under</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-words-to-never-use-in-a-job-interview">10 Words to Never Use in a Job Interview</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-ace-your-next-coffee-interview">How to Ace Your Next Coffee Interview</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-dream-jobs-youre-never-too-old-to-pursue">9 Dream Jobs You&#039;re Never Too Old to Pursue</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/escape-your-dying-industry-with-one-of-these-8-careers-instead">Escape Your Dying Industry With One of These 8 Careers, Instead</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career Building Job Hunting career mistakes depressing jobs job search money mistakes poor Thu, 03 Dec 2015 18:01:37 +0000 Kentin Waits 1617975 at http://www.wisebread.com 20 Money Mistakes Everyone Makes But No One Talks About http://www.wisebread.com/20-money-mistakes-everyone-makes-but-no-one-talks-about <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/20-money-mistakes-everyone-makes-but-no-one-talks-about" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_piggy_bank_000072626017.jpg" alt="Man making money mistakes everyone makes but nobody talks about" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Although Americans are known, adorably, throughout the world as a culture of loud mouths, we are very secretive about money. In fact, a financial health study in 2013 by Wells Fargo Bank revealed that 44% of Americans would rather discuss death, religion, politics, or their personal health than their financial situation.</p> <p>Our communal <em>tightlippedness </em>about financial problems keeps everyone in the dark. Because we are not able to learn from others' mistakes, we blindly walk into impending financial disasters, without a word of warning. Our unwillingness to discuss money can result in terrible financial problems, emotional stress, and even heartbreak.</p> <p>Here is a list of some of those terrible money mistakes.</p> <h2>1. Counting on Social Security</h2> <p>The Social Security trust fund is scheduled to run out in 2037. This does not mean that people will receive no Social Security. It d<em>oes </em>mean that if nothing changes between now and then, people can expect to <a href="https://www.ssa.gov/policy/docs/ssb/v70n3/v70n3p111.html">take a 24% cut</a> in their scheduled Social Security benefits. People need to plan their retirement accordingly, in order to make up for this loss.</p> <h2>2. Going Poor From a College Education</h2> <p>It's a much-beloved American belief that one can escape poverty through education. And, up until the current generation, this has been somewhat true. Unfortunately, ballooning costs of education have made college a financial risk for many Millennials. According to a recent survey, the class of 2015 is the <a href="http://blogs.wsj.com/economics/2015/05/08/congratulations-class-of-2015-youre-the-most-indebted-ever-for-now/">most indebted ever</a>, with students owing an average of $35,000 in student loan debt. For many people who grow up poor, a college education actually increases their poverty.</p> <h2>3. Being Ignorant About Home Loans</h2> <p>I can say with 100% certainty that I did not understand my home loan when I bought my house. Luckily, I had a trustworthy real estate agent and mortgage broker who did not take advantage of my ignorance. Alas, many Americans discover too late that they have trusted the expertise of the wrong people.</p> <p>People are often confused about what is required to get a home loan. For example, 36% of Americans mistakenly believe that a <a href="https://www.wellsfargo.com/about/press/2015/homeownership-survey_0616/">20% down payment</a> is always required.</p> <p>One of the big questions any home buyer should ask is &quot;Does this make financial sense?&quot; In certain situations, you may want to weigh <a href="http://www.wisebread.com/when-you-should-and-shouldnt-rent">buying vs. renting</a>.</p> <h2>4. Overspending on Housing</h2> <p>Conventional financial wisdom states that housing should not make up more that 25% of your paycheck. This idea, of course, is hilariously unachievable to many people who live in expensive cities like San Francisco or New York. To cut costs, consider renting out your home as an Airbnb, or adding a roommate. Not every home must be a castle.</p> <h2>5. Not Understanding the Scope of Your Debt</h2> <p>In a recent study, researchers <a href="http://www.newyorkfed.org/research/epr/2015/EPR_2015_comparisons_brown.pdf">compared the household debt</a> as reported by borrowers to the Survey of Consumer Finances with the debt reported by lenders to Equifax using the Consumer Credit Panel. The outcome of the study showed that people have a good grip on how much they owe on their houses and cars, but not so much when it comes to credit cards and student loans.</p> <p>The researchers discovered that people estimated their credit card debt to be 40% less than what the lenders reported. Families underestimated student loan debt by 25%. The gap was worse in households with more than one adult. Researchers posit that people may be good at estimating their own debt, but terrible at estimating the debt of others.</p> <h2>6. Being Financially Unfaithful to Your Spouse</h2> <p>I was shocked to discover that 43% of married couples cannot correctly state their <a href="http://www.goodhousekeeping.com/life/money/news/a33112/spouse-salary-conversation/">partner's salary</a>. What's even more bonkers is that one in three adults in a combined financial relationship admits to <a href="http://www.wisebread.com/is-your-partner-financially-unfaithful-1-in-3-are">financially deceiving their partner</a>. No wonder so many marriages end over money issues.</p> <h2>7. Forgetting About the Children</h2> <p>Parents in every tax bracket have a hard time talking about money with their children. Keeping kids financially illiterate can have <a href="http://www.wisebread.com/4-signs-you-are-teaching-your-kids-bad-financial-habits">lifelong repercussions</a>, none of them good.</p> <h2>8. Forgetting to Budget</h2> <p>A Gallup poll reveals that only 32% of Americans prepare a <a href="http://www.gallup.com/poll/162872/one-three-americans-prepare-detailed-household-budget.aspx">detailed household budget</a> every month. This means the other 68% are just winging it. Without an accurate picture of where and how money is spent, it is impossible to make solid financial decisions.</p> <h2>9. Not Saving an Emergency Fund</h2> <p>I am a big fan of the &quot;<a href="http://www.wisebread.com/a-comprehensive-guide-to-the-debt-snowball-method-0">Debt Snowball</a>,&quot; as I have personally used it will great success. While many people focus on the snowball part of his debt management strategy, others ignore his first key step in paying down debt: putting $1000 in an emergency fund.</p> <p>Having an emergency fund is the foundation of financial well-being. Why? Because according to the Federal Reserve, 47% of Americans do not have the ability to cover an unexpected expense of just $400 <a href="http://www.federalreserve.gov/econresdata/2014-report-economic-well-being-us-households-201505.pdf">without selling something</a>. It's virtually impossible to stay out of debt if every little emergency forces you to borrow money.</p> <h2>10. Financing Major Purchases by Debt</h2> <p>My husband wants to buy a new television. However, because I am a shrill harpy, I have forbidden him to buy a new TV on credit. My reasoning: if we can't buy it with cash, we can't afford it. It makes a lot more sense for him to put away money each month for the television, even if it's in a savings account with a crappy interest rate, versus paying interest to a credit card company.</p> <h2>11. Buying New</h2> <p>Everyone knows that cars lose value the second they are driven off the lot. Most people never think about how virtually the same concept is true for almost every other new purchase. I am a great proponent of buying used. In fact, buying used goods is one of the ways I managed to <a href="http://www.wisebread.com/how-i-saved-30000-and-helped-the-earth-at-the-same-time">save over $30,000</a> in less than eight years.</p> <h2>12. Relying on One Source of Income</h2> <p>Working more than one job is stressful &mdash; believe me, I know. But even salaried workers with benefits can increase their financial stability by taking outside work. In shaky economic times, it literally pays not to put all your financial eggs in one basket.</p> <h2>13. Underestimating Tax Bills</h2> <p>For freelancers who never get a W2 form, April 15th often includes a bad financial surprise in the form of a bigger than expected tax payment. Make it a point, as soon as possible, to review your tax returns from previous years to get a clearer picture of what you will actually owe in taxes this year. If your income varies widely from year to year, get in the habit of putting at least 10% of every paycheck in a savings account to offset your taxes.</p> <h2>14. Failing to Negotiate Prices</h2> <p>Haggling is not just for garage sale shoppers. Big-box and department stores will usually match competitors' prices, so it pays to do price comparisons before buying big-ticket items. Also, cash is king. Many retailers are willing to adjust prices if you can pay cash. It never hurts to ask. (See also: <a href="http://www.wisebread.com/11-retailers-where-you-can-negotiate-a-lower-price?ref=seealso">11 Retailers Where You Can Negotiate a Lower Price</a>)</p> <h2>15. Overspending on Gifts</h2> <p>Consumer counseling agencies see a 25% jump in the number of <a href="http://abcnews.go.com/Business/story?id=88539">people seeking help</a> in January and February. After hundreds of dollars of holiday expenses, even minimum monthly credit card payments become more than they can afford. According to the American Research Group, Americans spent, on average, <a href="http://americanresearchgroup.com/holiday/">$861 for holiday gifts</a> last year. This is a princely sum for many people.</p> <p>There are numerous ways to hack holiday debt, including making your own gifts. My family agreed to stop exchanging Christmas gifts in 2001, an extreme decision that had many unexpected positive results. An old-school trick that always works is to put money into a jar (or a savings account) every month for holiday costs. What gets saved from January through November is the holiday budget for December.</p> <h2>16. Screwing Up Your Perks</h2> <p>I have managed to lose not one, but two free international round-trip tickets due to poor mileage rewards management. But credit card rewards are just one perk that people fail to use. Over the course of the year, people lose thousands of dollars in merchandise and services by just not using them. This is known as <em>breakage</em> or <em>spillage</em> in financial parlance.</p> <p>Breakage is such a common mistake that the gift card industry banks on it. Between 2005 and 2011, a <a href="http://blogs.wsj.com/economics/2011/12/24/number-of-the-week-billions-in-gift-cards-go-unspent/">staggering $41 billion</a> worth of gift card value was lost to expiration dates and misplaced cards.</p> <p>To reduce my personal breakage, I now tape coupons and gift cards to the front of my refrigerator so I remember to use them and have switched to an air miles program where the miles never expire.</p> <h2>17. Falling Victim to Rewards Credit Cards</h2> <p>Rewards cards can have a cost. My APR rate for my rewards card is 2% higher than my old non-rewards card. I make every effort to reduce this cost by paying off my bill every month in full, but many people are not this diligent &mdash; and quickly lose any rewards savings to interest payments. Additionally, even the most responsible bill-payers can fall victim to purchase acceleration. People tend to spend more the closer they get to the reward, often buying things they wouldn't necessarily have bought with cash. (See also: <a href="http://www.wisebread.com/12-habits-of-highly-responsible-credit-card-users?ref=seealso">12 Habits of Highly Responsible Credit Card Users</a>)</p> <h2>18. Not Continuing Your Education</h2> <p>I spend a ridiculous amount of time on the Internet watching how-to videos about the digital universe. Video tutorials are an excellent way to hack a continuing education, without having to pay for traditional college courses. You can also visit your local library, where you may find some educational freebies. For example, the Los Angeles Public Library offers <a href="http://www.colapublib.org/learn/">free Lynda.com tutorials</a>.</p> <p>Learning new things is vital to continued employment. Many workers accidentally age themselves out of their preferred jobs by not refreshing their skill set to stay competitive with younger workers. Learning new skills can also lead to promotions, greater negotiating power, and the ability to change careers.</p> <h2>19. Missing Out on Food Stamps, Unemployment, and Other Benefits</h2> <p>For several years I lived below the poverty line, but never thought to apply for food assistance because I didn't realize I qualified. I had a job, and I didn't know that most people who receive food assistance also worked.</p> <p>Not exploring food stamps and other benefits when you are struggling is really dumb. The extra $101 a month I could have received in food assistance would have made a huge difference in my life. I could have used the $101 to pay for necessary car repairs or to take a class that would have improved my employability.</p> <p>The USDA issued a 2012 report stating that <a href="http://www.fns.usda.gov/sites/default/files/BuildingHealthyAmerica.pdf">lack of information about eligibility</a> is one of the primary reasons qualifying Americans don't consider signing up for food benefits. Shockingly, less than half of all eligible nonparticipants are even aware that they qualify.</p> <p>Don't leave food on the table.</p> <h2>20. Not Seeking Out a Financial Mentor</h2> <p>Sure, I'm good at managing money. Duh &mdash; I write for a personal finance blog. But that doesn't mean that there's no room for improvement. My accountant and bookkeeper help me stick to my financial goals and develop the best practices for managing my money year round. Even the most money-savvy people can benefit from an outside opinion.</p> <p><em>What money mistakes do you rarely talk about?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/max-wong">Max Wong</a> of <a href="http://www.wisebread.com/20-money-mistakes-everyone-makes-but-no-one-talks-about">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-secrets-you-need-to-tell-your-financial-adviser">11 Secrets You Need to Tell Your Financial Adviser</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past">It&#039;s Never Too Late to Fix These 5 Money Mistakes From Your Past</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-types-of-overspenders-which-one-are-you">5 Types of Overspenders — Which One Are You?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-meditation-can-make-you-a-money-master">6 Ways Meditation Can Make You a Money Master</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-critical-money-mistakes-people-make-in-their-40s">7 Critical Money Mistakes People Make in Their 40s</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance financial disasters money mistakes Secrets stress Tue, 24 Nov 2015 10:00:06 +0000 Max Wong 1615579 at http://www.wisebread.com