Forbes Magazine published a list of common money mistakes many of us make. Which ones are you making?
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1. Not having a budget. Chances are you have more than Matt’s three monthly expenses and unless you’re budgeting, you can’t keep track of them. No need to be old fashioned and create a spread sheet. There are plenty of online tools available to make this a painless process.
A budget is not the police.Tweet This
2. Avoid bank fees. Bank fees are for suckers. There are plenty of banks that don’t charge you for the privilege of housing your money while paying you crap interest.
3. You have no emergency fund. There are different definitions of what an emergency fund is. For some it’s $1000 in a checking or savings account. For others it’s a year’s worth of expenses invested. For most of us, it’s somewhere in between and having any emergency fund is better than none.
4. 5. Not taking full advantage of matching 401K funds and not contributing from your first pay check. What if your employer doesn’t match? It’s still worthwhile to contribute because it takes money from your check before you can miss it and if you can contribute enough to drop you down a tax bracket.
6. Not knowing how much you should save for retirement. If you don’t know this, listen to our episode on the 4% rule.
7. Not choosing the best student loan repayment plan. There are several options depending on the type of loans you have, your income, and the field and sector you work in.
8. 9. 10. The next three address estate planning, disability and life insurance. Perhaps not something a lot of you are thinking about just now, but become more important the older we get and if we start a family.
11. Using an investment adviser as you financial planner. LMM is going to make the editorial decision to tell you that you don’t need either of these. No one will ever care more about your money than you and these guys rarely beat the average. So save your money, listen to us and learn to do this yourself.
12. Only considering the upside when choosing investments and choosing those investments based on ratings or headlines. Yes you could absolutely pick a stock, get a lucky hit and retire at 25. You could also lose your ass. Do your research, don’t choose based on media hype, that’s what the media does. Today’s Tesla could be tomorrow’s Edsel.
We know our listeners are savvy and getting savvier but take an overview of your situation and see if you are making any of these mistakes.
Betterment: On-line investment tool.
Mint: On-line budgeting tool.