Top Five Mistakes People Make With Their MoneyFeb 25, 2020
Channeling David Letterman and all those Top Ten lists. I thought it might be fun to compile one of my own. To wit:
The Top Five Mistakes People Make With Their Money
This is a list compiled after about 25 years of experience.
You eat out way too much. This is what your kitchen is for! If you get a sandwich and a coffee in Miami on a daily basis, you’ve spent ($10/day * 20 days) $200 in a month! How about all that fast food? I’m seeing families who spend several hundred dollars each month eating out, when a little planning and Publix time could save much of that money and everyone would be healthier and richer for it.
You don’t have enough life insurance. What happens if you get hit by a bus? Are your existing savings enough for your surviving spouse and children? Term insurance is relatively cheap and easy to obtain. No excuses. See Mistake #5.
You don’t have an emergency fund. Emergencies are not a matter of whether, but of when. The transmission will go out. The A/C will eventually need replacing. The roof will leak. Or we have a Coronavirus shutdown. Murphy’s Law still prevails. Anticipate the expenses, and save toward them, thereby keeping yourself from going into debt.
You don’t contribute up to the employer match in your 401k. It is very common for employers to match your contributions up to a certain percentage. Fifty cents on the dollar up to 6% of earning is a common formula. That means that if you contribute only 4%, and you earn $75,000, you’re leaving $750 on the table. For shame!
…drum roll please…and now,
Mistake #1 – my pet peeve
You over-withhold on your federal taxes. People like to get big refunds. Makes no sense. All you’re doing is getting your own money back at 0% interest. If you have a $2400 refund, that’s an additional $200 you could’ve had in your paycheck each month. See Mistakes #3 and #4.
Do you see yourself here? Let’s talk your concerns over.
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