Avoid Common Money Mistakes
We are all human and make mistakes—even with our personal finances. Making financial slip ups can lead to stress and I try to minimize it in my life as much as possible. I know for a fact that it is inevitable that I am going to make some type of mistakes throughout my life when it comes to managing my personal finances, but I like to put a positive spin on things. I have learned that once I’ve realized I have done something wrong or made a mistake, especially when it comes to money, I try to correct it as soon as possible. Making the right decisions after you have committed a financial faux-pas can be the determining factor between getting approved for that new car loan or having to hitch a ride from friends to get places.
One huge money mistake that happens to thousands of people every year is identity theft. I can tell you from first-hand experience that college campuses are a prime target for identity theft. Young college kids are tempted all the time to fill out forms with their personal information to receive a free sandwich or backpack which can lead to someone stealing your information and taking out credit cards in your name and causing serious damage. In addition to not falling for the freebies and giving our your personal information, you can monitor your credit report on a monthly or tri-monthly basis to make sure no suspicious activity is occurring. Something as simple as investing in a small paper shredder is also another great way to prevent people from accessing your your personal information. Check out the Miss Money Bee Identity Theft Online publication for specific steps to take for restoring your identity if you were a victim of identity theft and are unsure of how to recover.
Missing a mortgage payment could be detrimental to your personal finances as well. If there is any debt you need to pay, it is your mortgage. First and foremost, you need a roof over your head. If you think you are going to be unable to pay your mortgage or have already missed the due date, contact your mortgage lender immediately and make arrangements. A lot of the time, if you talk to the lenders before your payment is due, they will try to work with you at least for a little bit until you get the money.
I have never personally bounced a check, because honestly, as a 23-year-old, my generation rarely, if at all, uses checks. I use my debit card for most of my purchases which has unfortunately allowed me to become a little too familiar with overdraft fees– especially in the past during my ‘broke college student’ days. Whether you bounce a check or overdraft your account with your debit card, both are money mistakes that you do not want to make. The best way to handle a bounced check or overdraft fee would be to immediately call your bank and go over your recent banking history—if it’s the first time you have bounced a check or swiped your card when the funds weren’t there, with a little luck, the bank may possible wave the fees involved. Even better, if you have a savings account, call your bank and have an overdraft protection program implemented. An overdraft protection program means whenever you make a purchase and your account doesn’t have the funds to cover that purchase, the bank will automatically take the funds out of your savings and use it towards that purchase, relieving you from any mishaps. Keeping track of all of your purchases in a check register or a phone application can prevent you from bouncing a check or getting an overdraft fee in the future. And now with the new Credit Card Accountability, Responsibility, and Disclosure Act, you can choose whether you want overdraft protection or not. In simpler terms, if you do not want to worry about paying bank overdraft fees, when the money is not in your account, your card or check will simply be declined and you will therefore receive no fees. It might be a little embarrassing, but it will save you from the possibility of ever getting those ugly fees of $35.
Maxing out your credit card is a money mishap that can land anyone in deep financial trouble. The median credit card debt for American households with credit cards is over $8,000. The first step to recovering from this type of money mishap is to stop using your cards. Cut them up or stick them in a bowl with water and put it in the freezer. Do whatever you have to do to prevent yourself from using your credit cards! Exceeding one’s credit limit can make you susceptible to over-the-limit charges which are another money monster that you want to stay clear of! Also remember to make at least the minimum payment on all your credit cards accounts and try to only spend what you have – stick to a debit card or cash. If you are really worried about your credit card debt and feel like you are getting nowhere with the payments you are making, get advice from a certified credit counselor. Consolidated Credit is an exceptional non-profit agency that provides great debt management programs along with free advice about how to get out of debt.
Just remember that we are all human and are bound to make mistakes—money mistakes can happen to anyone. Just make sure you learn from your mistakes and be proactive about the situation. Take control of your finances by following these simple and helpful tips and in no time, you can find yourself stress free, at least when it comes to your personal finances. 😉
About the Author
Samantha Savory is a 20-something-year-old recent communications graduate whose mission is to financially succeed and thrive in this economy. She writes about personal finance and anything related to shopping and saving money.