Share:
- &layout=button_count&show_faces=true&width=450&action=like&colorscheme=light&height=21″ scrolling=”no” frameborder=”0″ allowTransparency=”true”>
From a 1,000-foot view, your finances look to be in order. You have a steady income, you pay your bills on time and you may even have a little extra cash with which to splurge on occasion. But unless you’re thinking ahead and protecting yourself from the unexpected, your finances may be a disaster waiting to happen.
Keep your costs manageable – now and in the future – by avoiding these five common and costly money mistakes:
1. Putting your home loan on the backburner. Ignoring your mortgage may mean you’re missing out on big savings in your monthly mortgage payment – especially with interest rates currently at historical lows. Touch base with your trusted mortgage banker on a regular basis to make sure you’re getting the most out of your home loan.
2. Procrastinating with your credit score. Having a good credit score is like having the world’s best coupon book for all of life’s major financial transactions. However, if you wait until you need a new credit card or loan to work on your credit, it may be too late. Improving your credit score can take several months depending on your situation. Don’t wait – take a peek at your credit score for free and find out your potential for improvement by visiting /a>.
3. Waiting to save for retirement. Compound interest – or earning interest on your interest (plus your contributions) – can make delaying retirement savings costly. Consider this: If you invest just $1 when you’re 20, it will be worth 1.75 times more than $1 invested when you’re 30, 3.5 times more than $1 invested when you’re forty and seven times more than $1 invested when you’re fifty.*
4. Skipping out on health insurance. If you wind up in the hospital without health insurance, it will cost you. In fact, nearly two-thirds of bankruptcies in the United States are considered medically-related, according to a study published in The American Journal of Medicine. Medically bankrupt families without insurance had on average $26,971 in out-of-pocket expenses, the study found.
The Obama Administration claims that its new Health Care Reform plan will make health insurance more affordable and accessible to more people – hopefully reducing the strain of medical-related financial hardship. Under the plan, 95 percent of Americans will be insured, according to the White House.
5. Neglecting to save for a rainy day. Just like health insurance, it isn’t easy to see the benefits of a rainy day fund until you need it. But if you don’t have savings to dip into if you lose your job or incur a major, unexpected expense, chances are expenses will wind up on a credit card, forcing you to pay interest on your emergencies. Avoid the financial burden of the unexpected by saving three to six months’ worth of expenses.
Putting away a few dollars now could save you big money in the future. When managing your finances, think beyond just the moment – and always consider what’s best for the long-term.
* Assumes 8 percent rate of return and retirement age of 65.
Similar Posts:
- 7 Things about Money I Wish I Knew in My 20s
- The New House And New Goals For 2010
- 5 Tips to Get Your Financial Life Ready for the New Year (Part 2)
- Options remain for those approaching retirement
- Column: How to stretch savings over retirement’s various stages
Recent Comments