This is usually the time of year when those New Year’s resolutions begin to lose their luster. Many of us have already added our favorite ice cream back to the shopping list, we’ve abandoned those new running shoes in lieu of our house slippers and unfortunately, many of us have slipped back into those unwise spending habits.
We thought this would be a great time to reiterate the importance of staying on course at least when it comes to your finances. The ice cream addiction? Yeah – we’re dealing with our own crisis of conscience – you’re on your own with that one.
Pay Those Balances Off
The big financial mistake: surviving on credit cards and not paying balances off each month. That’s really two mistakes, but they go hand in hand. If you’re living off your credit cards, you’re setting yourself up for major problems. The kicker in this, though, is that most folks relying on their credit cards these days aren’t splurge shopping, but rather, they’re paying bills and buying groceries. It’s difficult to leave the credit cards at home when the car insurance is due. Still, the smallest efforts can make a world of difference.
If you’re not paying off your balances each month, this should be a goal you’re working hard to accomplish. At a minimum, you should be paying far more than what’s due each month. If you’re not disciplined enough to do this, it’s time to rethink a few things and make an effort to overcome it. Just from a financial standpoint, there are hundreds and even thousands of dollars at stake every year just in finance charges.
Those dreaded impulse purchases get us in trouble every time. The guilt is worse than realizing you’ve just restocked the freezer with that ice cream we mentioned. Impulse purchases almost always equate to regret. Ask yourself if the purchase is necessary. If not, try to take a step back and give it a bit more thought. Impulse buys are just that: a spur of the moment decision. Try this: wait one minute before you click buy or add it to your shopping cart. You might be surprised at what one minute of awareness can mean.
A Rainy Day
Having no emergency fund is another one of those regretful habits. In fact, many folks build a nice little emergency fund only to hijack it as soon as those flat screen TVs go on sale or the new iPads are made available. Not having the latest iPad release does not constitute an emergency – no matter how you justify it in your mind. Again, take a step back and think about the peace of mind that comes with having that emergency fund. It’s far more valuable than any technological gadget on the market today. Besides, two days after you buy whatever the latest “must have” is, you can bet an upgrade is already on the way.
Not taking the time to understand the logistics in the financial sector is also a mistake you should never again make. Specifically, the credit card lingo that’s in the terms and conditions is especially important since it affects your wallet every single month. Make it your business to set aside an hour over the weekend and educate yourself on the various verbiage. Knowledge is power, after all.
Check for Errors
Have you checked your credit report recently? This is another great resource to better understand your financial health. There are many credit reports with erroneous information and too often, consumers either are denied credit because of those mistakes or pay for those mistakes with higher interest rates. You can request a free credit report once a year or anytime you’re denied credit. This too is also an hour well-spent.
Room With a View
Ever envy thy neighbor? It’s human nature and seeing that new boat in the neighbor’s driveway is just enough of a visual image to have you considering the possibilities. Your best bet, though, is to make a few sandwiches, load the ice chest and show up at the neighbor’s house in hopes you can spend some time on his boat next time he takes it out. Rest easy knowing you don’t have that financial burden – especially with the way gas prices continue to climb.
These are just a few of the important considerations associated with your credit. Every little bit helps and you’ll be better for it in the long run.