There is always lots of talk about how you should manage your money and what you should be doing. But what about the things that you should not be doing? Let’s discuss some of these here…
- Carrying too many credits cards with balances. Credits cards can come in handy for emergencies and for earning rewards but having many cards that are maxed out is a sign of a problem. Credit cards have extremely high interest rates which makes it difficult to pay down your debt.
- Taking out too many large loans. Just as having credits cards with large balances can damage your financial well-being, so can having too many loans or loans that are too large. Before signing a loan for a house or car, be sure that you can afford the monthly payment. Most financial institutions will help you figure out how much you can borrow based on what monthly payment you can afford and what your interest rate will be.
- Keeping up with the Joneses. Seeing your neighbor who makes less money than you buy a new car or new furniture can entice you to do the same. Don’t let yourself get sucked in, your neighbor may have more debt than you know!
- Taking advice from others who are broke. We all need a little help now and then but it is important to choose carefully who you seek out for advice.
- Buying expensive gifts. Instead of buying a new computer or iPad for your family members, consider giving your time or a less expensive gift that they will enjoy. Also, talk with your family about drawing names for gifts. That way everyone only has to buy one gift.
- Ignoring your debt or lack of savings. Debt is not a problem that will go away on its own so it is helpful to develop and stick with a plan for paying it off.