5 most common money mistakes you could make

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The most financially savvy person isn’t immune to making money mistakes, and that’s OK. Sometimes it can be helpful to check where you are financially to make sure you’re not accidentally spending on something you don’t need or delaying your financial commitments with deadlines.

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Review some of these most common financial mistakes and, if necessary, make appropriate adjustments.

Sticking to exceeded financial goals

Most individuals set financial goals when they start budgeting and work diligently to achieve those goals accordingly.

Take a moment to review your financial goals. Have you recently achieved any of these goals, such as paying off credit card debt? Are some of your financial goals no longer relevant to you and your needs? Review the financial goals you have right now. Re-determine the priority of each objective. If you find that some are no longer relevant or if you have already achieved these goals, make a note to set new financial goals to align them with the changes in your life.

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Delay the maximum of your retirement account

Do you have a traditional retirement account or a Roth IRA? There’s still time to maximize your account contributions in 2022. Anyone under age 50 can contribute up to $6,000 to their account for the year. People over 50 can add an additional $1,000 each year as part of their catch-up contributions.

While it’s not a financial requirement to max out your retirement account each year, it’s highly recommended that you do so if you can afford it. This also applies to any employer-sponsored retirement plans you may participate in at your workplace. Maximizing these accounts allows your investments, and any potential income, to grow tax-deferred.

Not reviewing credit card statements

How often do you check your credit card statement? It’s not uncommon to skim a statement to see the total balance owing or decide not to read it at all and let automated payments take care of it.

However, those who carefully review their credit card statements each month may find that they are able to prevent common financial mistakes from occurring. Some of these may include cutting back on services you rarely use or noticing duplicate billing that you haven’t done and may notify your credit card company.

Choose not to automate bill payments

Choosing not to automate bill payments is not necessarily a mistake. Rather, it’s a suggestion that can help prevent bill payers from making financial mistakes such as forgetting to mail a check or make a payment before a bill’s due date. specific.

Automating financial decisions, from scheduling payments to setting aside a percentage of your income for retirement, does more than ensure you meet deadlines. It can help you save money.

For example, let’s say you have a specific dollar amount taken from each paycheck. You put it directly into an investment fund, like a low-cost index fund, through an automatic contribution setup. Regardless of what happens in the stock market, you are putting money into the market.

Embracing automation is more than setting up contributions and not having to think about it afterwards. In the long term, automation helps individuals practice cost averaging and build significant wealth.

Avoid checking your bank accounts

It’s easy to be ambivalent about logging into your bank account to check your checking or savings balance. This is especially true if you use a debit card frequently and have multiple pending transactions coming into your account at the same time.

You may not want to peek into your account, but you should make it a habit to check these accounts daily. It’s important to know how much you have in checks and savings to make sure you know how much cash you have available at all times. This prevents overdrafts on all accounts.

Additionally, a watchful eye on checking and savings accounts can be quick to notice any unauthorized transactions and report them promptly to mitigate the negative effects of fraud or identity theft.

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About the Author

Heather Taylor is Senior Financial Writer for GOBankingRates. She is also the editor and brand mascot enthusiast for PopIcon, Advertising Week’s blog dedicated to brand mascots. She has been featured on HelloGiggles, Business Insider, The Story Exchange, Brit + Co, Thrive Global and other outlets.

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