Did you know that more than two out of every three middle-class Americans admit to having made at least one significant poor financial decision? And nearly half of us admit to having made at least two. We’re talking about mistakes that cost between $5,000 and $23,000 on average here, according to the Consumer Federation of America. So if you’ve made a few yourself, know that you are far from alone. Let’s examine the three of the main areas where most personal finance professionals will begin, helping you avoid the most common financial pitfalls.
Institute and Track a Personal Budget
I know, I know; it’s much more fun just to spend, spend, spend. But doing that ends up leading to overspending. This way, you keep control of your spending and make sure you’re living within your means — instead of beyond it. Think about it this way: you’d never set out on a road trip with no idea how much gas is in your tank, would you? Well, going through your month without tracking your expenses is just as foolish — if not more so. Just like roadside emergencies do happen even to those who plan ahead, financial disasters can happen to the best of us. But for those who budget carefully, they’re far less likely.
Pay Off Credit Cards Monthly
Credit card debt makes monthly expenses more challenging to meet, no matter what income level you have. Instead of thinking of it as a free pass, consider every expense you put on a credit card (if you can’t pay it right now) to be a loan on which you’ll be paying interest. So if it’s on sale for 20% off, you’re essentially paying full price. Instead of paying things off, get into the habit of saving up for them — something you can incorporate into that budget you’re putting together. Not only is it more financially sound, but it’s also much more rewarding when you finally save up enough for that big expense — instead of paying it off after its original allure has become a little less exciting.
Keep Insurance Policies & Other Important Documents Updated
Even if the idea of a budget and freedom from credit card debt are obvious to you, you might be making the mistake of letting important financial, legal, and insurance paperwork become outdated. Perhaps you have a shorter commute than you once did or your 401K hasn’t been rebalanced in a while. By annually reviewing your investments and other fiscally significant documents, you might just save yourself a little more green stuff you can plug back into that budget of yours.
If you’re not sure how to get started in addressing these important financial issues, you might benefit by getting advice from a financial planner or another professional at a financial institution that you trust.
The Nicholas Insurance Agency, led by Greg Nicholas, is a family owned business serving the York county, Pennsylvania region. In the insurance business since 1981, Greg Nicholas helps families, businesses and individuals understand the value of different insurance products and make wise decisions when selecting the best insurance products for their specific situations.
Offering exclusively Allstate insurance products, the Nicholas Agency provides auto, homeowners, rental and landlord insurance as well as life & disability, recreational vehicle, motorcycle and personal liability insurance.
For more information, visit our two York, PA locations at Westgate Plaza or York Marketplace or call us at (717) 764-2024.