Hiccups in our financial world shouldn't bring our proverbially house tumbling down. Too often, though, they do. And it's only because we've fallen into some pretty bad habits that, when our finances encounter a rough spot, it wreaks havoc in our lives. Here are five financial missteps to avoid to help keep your financial house on a firm foundation:
Financial hiccup number one: living beyond your means. Simply put, if you don't make it, don't spend it. But low interest rates over the past decade, and high and easy credit card access, have sent many of us on buying sprees we really couldn't afford when we made them, and sure can't afford now when we're trying to pay them off. Figure out what you make, and what you owe, budget all of it, and don't spend more than you make.
Financial hiccup number two: too many credit cards. Too much credit gives you a false sense of your real income. This can happen any number of ways. You may not think of that big box purchase as a credit card, but in effect, it is-just specifically for that store. Shut down lines of credit, in-house accounts, close all but one or two credit cards, and keep those balances well below their maximums. Better yet, pay them off every month. If you are really out of financial control, cut those cards up, or lock them in a bank vault so they're harder for you to access-and don't keep the numbers written down anywhere, either, for late night television, online or catalog binge-shopping.
Financial hiccup number three: paying Peter, but forgetting about Paul. Sometimes, you cannot pay everything at once. Those are hard times, indeed, and you need to choose what you'll pay first. A roof over your family's head and food on your table are non-negotiables, no matter what. You can afford a credit card being shut down much better than you can afford a foreclosure on your home. So when you pay your bills, prioritize and pay down towards what's most expendable-likely that big box buy.
Financial hiccup number four: spending as a pastime. When you don't have money, don't tempt yourself by spending Saturday afternoon in the mall, or browsing online, or flipping through glossy pages of your favorite outlet catalog. Put them away, throw them out, do something-anything-else to get your mind off spending money as a hobby. Instead, go to the park, volunteer at your local pet shelter, or take the kids to the library for reading hour.
Financial hiccup number five: ignoring your credit history. When did you last check your credit score? Too often, we ignore our credit rating at our own peril. Check your credit report at least once each year. It can be a really useful financial wake-up call. And, unless you check, you cannot know whether you've been dinged in error for missing payments, non-payment, or other problems that lower your credit rating. It's worth your time to make sure what's on your credit report is accurate and up-to-date. If it's not, you can write creditors and get mistakes fixed-and that's an instant credit score boost for you.
Money management is about taking the time to know how much you really make every month, and so what you can truly afford, and then not spending beyond those limits. It can feel very rewarding at the end of each month when you have paid all your bills, and even have a little left in the bank for emergencies.
Author Resource:
BHM Financial is one of the most trusted names in the Canadian car title loan industry. If your credit is less than stellar and you need money in a hurry, visit Bad Credit Loans website today, and breath easier tomorrow! Visit our blog for more articles about Bad Credit and Debt.
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