{"id":17834,"date":"2019-05-03T15:42:32","date_gmt":"2019-05-03T19:42:32","guid":{"rendered":"https:\/\/blog.eztaxreturn.com\/?p=17834"},"modified":"2024-12-03T06:05:32","modified_gmt":"2024-12-03T06:05:32","slug":"7-money-mistakes-that-will-haunt-you-for-a-long-time","status":"publish","type":"post","link":"https:\/\/staging.eztaxreturn.com\/blog\/7-money-mistakes-that-will-haunt-you-for-a-long-time\/","title":{"rendered":"7 Money Mistakes That Will Haunt You for a Long Time"},"content":{"rendered":"\r\n

We\u2019ve all made mistakes in our younger years that we\u2019ve come to regret later on down the road.\u00a0 Whether it\u2019s not saving enough, taking on too much student debt<\/a> or not investing in a company when we had the chance.\u00a0 While some financial blunders are easy to fix, others can have you kicking yourself for years to come.\u00a0 Here are some money mistakes that can have lasting effects. Developing bad money habits to avoid<\/a> is crucial to setting yourself up for long-term success. Failing to budget effectively, for example, can lead to overspending and a cycle of debt that’s difficult to break. Similarly, neglecting to build an emergency fund can leave you vulnerable to unexpected expenses, which may derail your financial stability for years.<\/p>\r\n\r\n\r\n\r\n

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Not keeping a budget<\/strong><\/h2>\r\n\r\n\r\n\r\n

Too often people rely on credit cards and don\u2019t realize they\u2019ve been overspending until they\u2019re already in debt. Creating a budget<\/a> and tracking your expenses can prevent you from spending money you don\u2019t have. You\u2019ll know what’s coming in, going out and how much you can save. All of which will make it easier for you to reach your financial goals.<\/p>\r\n\r\n\r\n\r\n

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Only paying the minimum on your credit cards<\/strong><\/h2>\r\n\r\n\r\n\r\n

When money\u2019s tight sometimes you can only afford to make the minimum payment on your credit card.\u00a0 It\u2019s a small amount but hey, something is better than nothing, right?\u00a0 Not really.\u00a0 While making the minimum payment does help you remain in good standing with your credit card company, you’ll be in debt longer than necessary and spend a lot more money in interest.\u00a0 Let\u2019s say you have a $500 credit card balance; the cards interest rate is 18% and you want to pay it off making only the minimum payment of 1% plus interest.\u00a0 It will take you 47 months to get rid of your debt.\u00a0 That\u2019s almost 5 years.\u00a0 In that time, you will pay $198.36 in interest on your $500 balance…that’s an additional 40% added to your debt.<\/p>\r\n\r\n\r\n\r\n

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Borrowing money from your 401K<\/strong><\/h2>\r\n\r\n\r\n\r\n

The main purpose of contributing to a 401K<\/a> is to get yourself financially prepared for retirement.\u00a0 Dipping into the account will set you back and cause you to miss out on potential growth.\u00a0 Usually when you borrow from a 401K, you aren\u2019t allowed to make any contributions until the loan is repaid.\u00a0 If you think you\u2019re struggling now, brace yourself because it\u2019s about to get even worse.\u00a0 Since most plans require repayment via paycheck deductions, you\u2019ll be bringing home a smaller paycheck.\u00a0 If your loan isn’t repaid by the deadline, the outstanding balance will be treated as taxable income.\u00a0 Those under age 59 \u00bd will also face a 10 percent early withdrawal penalty.<\/p>\r\n\r\n\r\n\r\n

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Sacrificing your retirement savings to help your kids<\/strong><\/h2>\r\n\r\n\r\n\r\n

A big dilemma for many parents is whether to save for retirement or fund their kids\u2019 college education.\u00a0 In fact, a recent Bankrate survey <\/a>revealed that 51 percent of Americans have sacrificed their retirement savings to help their adult children.\u00a0 Letting your kids fend for themselves doesn\u2019t make you a bad parent.\u00a0 They can take out a loan, apply for scholarships or get a job to cover their tuition.\u00a0 Meanwhile you won\u2019t have many options for supporting yourself once you stop working.\u00a0 So, go ahead and put yourself first.<\/p>\r\n\r\n\r\n\r\n

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Failing to save for emergencies<\/strong><\/h2>\r\n\r\n\r\n\r\n

You can\u2019t predict the future, but you can prepare for it.\u00a0 One of the best ways to get ready for a financial crisis is to build an emergency fund.\u00a0 You need enough money to cover at least 3 to 6 months\u2019 worth of living expenses.\u00a0 Make a list of all your critical monthly expenses along with the cost.\u00a0 Calculate the total then multiply it by 3.\u00a0 This will give you a good estimate of how much money you\u2019ll need to stay afloat for at least three months.\u00a0 Review your budget and start setting aside money from each paycheck to reach your savings goal.\u00a0<\/p>\r\n\r\n\r\n\r\n

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Letting your credit score plummet<\/strong><\/h2>\r\n\r\n\r\n\r\n

Your credit score plays a huge role in your financial life.\u00a0 Having a good credit score means you\u2019ll receive the best rates on loans and insurance.\u00a0 Plus, a higher credit limit.\u00a0 On the flip side, a low credit score will cost you more money.\u00a0 In some cases, it can also prevent you from getting a new job or apartment.\u00a0 Even if your score isn\u2019t where you\u2019d like it to be there are things you can do to put yourself in a better position.\u00a0 Use these tips to give your credit score a boost.<\/p>\r\n\r\n\r\n\r\n