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Avoid Common Money Mistakes

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We all have shortcomings when it comes to managing finances. Identify your underlying money management mistakes ditch less effective financial habits and take control of your future.

Here's what NOT to do:

Mistake #1: Spend Mindlessly

Do you spend money on things that don't matter to you? It's easier to make purchases that align with your priorities when you determine your life values and set financial goals. Uncover what you cherish most to make wise financial decisions that align with your core values.

Mistake #2: Let Your Financial Paperwork Pile Up

Make time to get organized. Stay on top of your finances so you are aware of important information about your accounts and know when payments are due. Actively manage your finances to avoid unnecessary late fees and additional interest charges.

Mistake #3: Shortchange Your Savings

Savings ensure you are covered in the event of a financial emergency and allow you to purchase that next big-ticket item without increasing your debt.

Mistake #4: Waste Money on Minimum Payments

Even an extra $10 each month toward your credit card balance makes a difference. Find the extra money by reducing your grocery bill, changing to a cheaper cell-phone provider or switching to a different cable carrier. Put any extra money you can find toward your credit cards.  Reducing your outstanding debt faster will put more money in your pocket in the future, meaning you won't have to use your credit card next time.

Mistake #5: Procrastinate

It’s easy to put off the tasks we want to do least. Take a lunch hour and tackle a financial goal, whether it’s reviewing your insurance policies or creating a will. Bonus points for opening a savings account. Seeing one of your financial goals put into motion may give you the boost of confidence you need to move on to your next goal.

Mistake #6: Put Off Your Future

Actively plan and manage your retirement. Even if it seems far away, begin to determine how you’ll pay yourself in your retirement years. If you are nearing retirement age or are currently in retirement, taking steps to understand items like when you should start making withdrawals from Social Security should take priority.

Acknowledging your past money mistakes now will enable you to recognize them — and replace them with better decisions — in the future. Over time you will see that these new financial habits become second nature.

[Any reference to a specific company, commercial product, process or service does not constitute or imply an endorsement or recommendation by National Endowment for Financial Education.]

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