Managing money responsibly doesn’t just happen. Even with the best of intentions, many people make mistakes in how they handle money – and they don’t even realize it. But there’s good news! Harmful behaviors can be unlearned. Let’s look at three common money mistakes and how to fix them.
Mistake #1: Ignoring Your Financial Situation – It is common for people to go about everyday living without a whole lot of thought towards their money. They may not know how much they have in their checking and saving accounts. They could also jam their heads in the sand when it comes to their outstanding debt. Awareness of how good or bad their credit score is? Forget about it! The hard truth though, is that ignoring money can lead to big-time consequences like excessive debt, missed payments and low or no savings.
The Fix: To avoid this mistake, assess your income, expenses, and savings regularly. Creating a budget can help you get a handle on your financial inflows and outflows. This way, you can identify areas where you can cut back, save more, and achieve and maintain financial wellness.
Mistake #2: Not Having a Clear Vision – The second common money mistake is a lack of financial plans or goals. Without an established vision, it can be challenging to make smart money choices.
The fix: Establish short-term and long-term financial goals. Whether it’s saving for a down payment on a house, starting a business or planning for retirement, having a clear vision will guide and motivate all your financial decisions while ensuring they are choices you can live with for years to come.
Mistake #3: Not Discussing Money – The third common money mistake is failing to talk about money with one’s life partner. Money is a sensitive topic, and many people believe they can avoid arguing over money by not talking about money. Unfortunately though, not talking about it can lead to misunderstandings, conflict, and financial instability within the relationship.
The fix: Have open and honest discussions about money with your partner. By establishing open lines of communication, you can work together to create a joint financial plan that aligns with both partners’ values and aspirations.
Use this guide to learn how to fix three common money mistakes and avoid making them in the future.
Questions? Want more information on Freedom? Contact your personal Freedom Federal Credit Union representative, Lisa Snodgrass at [email protected] or call 410-612-2123!
About Freedom Federal Credit Union
Freedom Federal Credit Union is proud to be your financial partner. Freedom serves and is open to anyone who lives, works, worships, attends school, volunteers, or has family in Harford or Baltimore County, MD. As a credit union, we are committed to putting you first, not shareholders, and helping you achieve your financial goals.
Learn more at freedomfcu.org or call 410-612-2123 to see how we can help.
