10 Dumbest Money Moves!!

You know how some things happen for a reason and are meant exactly for you. Well, as soon as I finished my last post I went to yahoo and this link came up! It is talking about the 10 Dumbest Money Moves and How to avoid them! I thought it was interesting so I thought I would share!

1. Not having a goal.

You should decide exactly what it is you would like to accomplish, then remind yourself of that goal often. Trying to buy a house? Trying to be a stay at home Mom? Saving for your kids education? Retire in your 50's? Whatever it is, write it down, and share it with whoever you are trying to accomplish it with!

2. Not having a spending plan.

Track and categorize your expenses with a budget or spending plan! A plan that includes what you can spend on things like entertainment, food, bills/housing, etc..This will help fine-tune your finances and find places to save!!

3. Attempting to derive self-esteem from possessions.

Money DOES NOT buy happiness!!! Driving the best car, wearing the nicest clothes, going out of your way to appear successful doesn't help you in the long run!! Nothing wrong with nice things if you can afford them!!

Attempting to derive self-esteem from possessions is not smart on 2 accounts. It's expensive and it doesn't work!!

4. Doing what everyone else is doing.

This was talking about stocks and real estate. Something I'm just not interested in right now(or understand)! Basically it was talking about don't listen to the "experts" on TV about the right time to buy stocks and etc..

5. Starting to save large and late rather then small and soon.

If your 25 and you save 5 bucks every day...150 a month...and earn 10%..by the time your 55 you will have $340,000. If you wait until your 45 you will have to save 1700 a month for 10 yrs to reach $340,000.

Today you really can't earn 10% without taking a risk but you get the point!

6. Paying interest to buy things that drop in value.

There are only 2 situations that paying interest makes sense, at least mathematically. The first is when a purchase goes up in value at a rate greater than the rate of interest your paying to fiance it. For example a business loan or student loan. Something that's going to return more then it cost in interest payments. The other situation is when you can earn more on your cash then your paying in interest. Obviously there are times when we have no choice but to borrow. The point being the less you borrow, the better.

7. Turning down free money.

If your company is offering to match money for your 401k or other retirement plan, if your not participating in this then you are turning down free money. Not to mention ignoring an opportunity to get a tax deduction and grow your retirement savings tax-deterred.

8. Buying a new car.

The value of a new car drops 15-25 percent as soon as you drive it off the lot. Buy a used one with low mileage for thousands less!

9. Buying more house then you need or can afford.

Spend 25% of your gross income on a mortgage, regardless of what size house you think you need. When you buy more square feet then your actually going to live in, you're required to insure them, furnish them, clean them, heat them and cool them! All that cost more money, time, and stress! Buying a big house makes sense if your trying to make a leveraged bet on the future of housing prices, OR if your trying to impress your friends!! If your not doing either, buy what you need and save towards more productive things!

10. Not protecting your good credit.

Credit is easy to screw up and hard to fix. Even though you think it doesn't matter, some day it might. If you have already messed up your credit, fix it and keep it in good shape!

Jared had made me a budget a while back and I never used it. (Don't tell him that!!) I will have to get him to make me another one! I have been doing so good this week with my spending and I have been trying to cook alot!! I looked online and made my grocery list by what was on sale, for the most part. We only ate out a few times, which is good for us. I sat down and figured out a good system to pay our bills. It feels good to be organized and save money!!