While we all wish we could be financial gurus and be a perfect example of financial perfection, that isn’t the case for most of us. Many of us struggle with money or finances from time to time and this can lead to a lot of stress and worry. However, with a little bit of hard work and dedication, money doesn’t have to be a worry.
By identifying the source of your financial hardships and realizing your money mistakes, you can get on the right track back to financial health. In an effort to help you out, we have crafted this blog post all about taking a look at some financial mistakes you might be making in your life.
You Might Be Drowning in Debt
There is no way around it, debt is one of the most destructive forces that is threatening your ability to be financially healthy. When you are in debt, some (or most) of your money is going to your creditors, which is not allowing you to save much at all.
The average American has thousands of dollars of credit card debt and the number is on the rise. Much of this comes from living beyond our means, or making purchases we don’t need, with money we don’t really even have. Some debts such as a car loan, student loans or mortgages are fine, but other types of loans should be limited.
You Might Not Have the Right Mortgage
Speaking of mortgages, not all home loans are created equally. Sure, some have different terms, lengths and interests rates, but those aren’t the only differentiating factors. In general, there are two categories of mortgages, government home loans and conventional home loans. While conventional home loans are common, they often have strict rules or guidelines and generally require a larger down payment.
On the other hand, government home loans (such as their rural development home loan, insured by the USDA) often require little to no down payment, and have much more flexibility. If you are struggling with finances and can qualify, these government home loans can be very helpful.
You Might Not Be Saving For Retirement
With the future of social security in question and pension plans being a rarity to some, it is in our own hands to ensure we save up enough money for our retirements. However, this is much easier said than done. In fact, statistics show that almost half of American families have nothing in retirement savings, and those who do save some, often don’t have enough.
The best friend of retirement savings is time. Time will help your retirement savings grow more than anything else, so start saving as soon as possible, even if it isn’t much. It will grow over time and you will be glad your started earlier as opposed to later. Not saving for retirement can lead to scary consequences, so be sure to prepare yourself as best you can.
You Might Not Be Budgeting
If we could give you one piece of advice to better your finances, it would be to ensure that you are budgeting. Having a budget is key to managing your money and will help you understand your spending habits. Whether you prefer to budget using paper and pen, Microsoft Excel or a budgeting software, any budget is better than no budget.
A budget should tell you how much of your money is going to certain things every month. You should know exactly how much you are spending on groceries, how much you are spending on debt and how much you are saving. If you don’t have a budget and are simply guessing, you might be surprised at what you might be missing or miscalculating.