When it comes to managing money, most people are frivolous at best and downright illogical at worst. On one hand, it’s understandable not to be attracted to a money-driven life, but on some level we all need money — and to be unwise with the funds we do earn is simply a dumb thing to do.
Here are seven dumb money moves everybody makes:
Eating Out Way Too Much
Unless you’re wealthy, eating out is never a good financial decision. Even per-pound, salad-bar offerings at a grocery store can’t compare to buying everything yourself at that same store. Sure, time is money and the latter require time to prep but learning how to quickly prep your meals will only contribute to you cutting down on eating out. Also, it’s not that hard to chop a cucumber or toss a salad, I promise.
Having No Idea Where Your Money Goes Each Month
It’s debatable how helpful a strict budget is, but not having a clear understanding of where your money goes each month is inexcusable. Maybe you can’t commit between $100 and $125 per month for entertainment, that’s fine, but if you check your checking account or credit card statement and blindly accept whatever total it tells you without analyzing your purchases, you’ll never get financially ahead.
Subscribing to Multiple Services You Don’t Use
The digital age has brought us every convenience we could want, many of them we don’t need and usually don’t end up using, at least enough to warrant paying a monthly subscription. Whether it’s a hot sauce subscription box and they’re just piling up in your spice rack or a record club and yours are only collecting dust, purge the monthly waste of funds.
Falling for Sales
Retail sales target our propensity for a perceived deal, yet they often trick us into buying things we don’t need. A pair of nice jeans selling for 60 percent off a price of a $200 price tag is still $80, which might only be slightly lower than the its original price. All while you bought your fifth pair of dark-denim jeans you didn’t need.
Short-Term Budgeting without Long-Term Goals
It’s great to exercise discipline and save for things we want — for instance, a vacation to Mexico. But what doesn’t make sense is only saving for a vacation to Mexico, while the rest of your income either stays stagnant or goes toward things that won’t provide you any future value.
Trying to Solve All Their Financial Problems at Once
What used to be a hot productivity trend has finally been exposed for what it is – humans are horribly ineffective at multitasking. Whether it’s at work or in your financial life, if you’re trying to make financial gains, focus your effort on things that matter.
As RamitSethi says on his blog, “Choose your battles wisely. We can only focus on so many things (something that flies in the face of our “do it all” culture), so it’s important to (1) pick the right areas to focus on, and (2) ruthlessly hone and optimize our approach within each area.”
Building a financial life takes time, allocate your energy to executing specific initiatives instead of spreading your attention so thin that nothing properly gets done.
Letting Debt Continue to Build
If you need to call your creditor to negotiate a lower rate or a balance transfer, do it. If you think a structured debt management or debt consolidation program will help, research them and choose one that suits you. If your situation warrants debt settlement or bankruptcy, it’s OK to be hesitant. But if you can’t get out of debt on your own, you have to do something.
Debt settlement and bankruptcy have negative reputations, but when a debtor is without other options, they can be more than worthwhile. Thousands of debtors’ stories confirm this when searching Freedom Debt Relief reviews and accounts of other debt settlement providers.
It’s OK to have made mistakes with your money, as long as you commit to be smarter to your future self. Keeping the above things in mind and think critically about what you want out of your money. Doing so will help you exercise a methodical approach that benefits your present and future financial self.