Getting Out of Debt_5c - Step 3 Build Wealth and Security: Financial Mistakes_1 to Avoid

Getting Out of Debt_5c - Step 3 Build Wealth and Security: Financial Mistakes_1 to Avoid

Financial mistakes_1, let us admit it, we all make them. It does not matter much who, what, when, or why at this point. What is important is that we realize we made a mistake and are committed to make the necessary corrections so we will be on track again. This way the mistakes will not lead us astray and put us on a major financial hardship. Here are some of those financial mistakes and the possible solution to take:

1. Too Much Spending on Unnecessary Things

One of the financial mistakes_1 is spending on lattes. This may not mean a lot but money earmarked for debt payment is lost a dollar at a time making the household debt grow steadily. When a recession hits, those who have been living beyond their means get into a credit crisis needing financial advice. So think twice before you spend your money on something that is not essential.

Check out your budget before you buy things you don't need. Find out if you have some extra money left over before taking on more expenses. Going out for dinner or lunch at $30 per week, for example, will save you $1560 a year. This is enough for you to pay an extra month of mortgage payment which can save you a lot of money on interest in the long run. This will be the key for you to get over this financial crisis.

2. Living on Borrowed Money is Dangerous

Buying anything on credit cards seems to be the sign of the times. What we do not know is when we do so, unless we pay it in full when the bill comes, we are really paying more for what we buy because of the high interest rates. Why would we want to pay double-digit interest on our hard-earned money? That makes what we buy on credit card more expensive. That reminded me that when I bought something online, I was hit with a $22 foreign transaction fee. Ouch, I tell you I felt like crying. I should have used a credit card that does not charge a foreign transaction fee.

There are places where a credit card is handy but don’t let that convenience turn into a nightmare. Choose cards that have no annual fees and have low interest rates. Just know that they charge fees for bounced checks, late payment.and for going over the limit. Then if you just pay minimum payment, you’ll be in for a rude awakening. Some said that if you only pay 2% on a balance of $10,000 at 18%, it will take you almost 51 years to pay for it and by then you will have paid almost $29,000 (nearly three times than what you owed).

3. Buying a New Car is a Mistake

How can buying a new car be a mistake? Well a lot of you probably know better than I do that a brand new car loses its value after it leaves the dealership and that you people have sense enough to buy a used car that gives you the same value. But you have to excuse both my husband and me because we are not car smart. We are afraid to buy a used car because it may turn out to be a lemon. I knw you could have it checked by a mechanic and also a brand new car could also turn out to be a lemon anyway.

Sorry to digress, but really not being able to pay cash for the car means the same as not being able to afford the car. And then on top of this, we are paying interest on borrowed money used to buy a car that is depreciating as fast as the disappearance of the sun on a cold winter day. This is one of the financial mistakes_1 people make. Top Car Secret. This doctor claims you can buy any car you want at 30%, 50% and even 90% off what everybody else pays and she will let you try it for 8 weeks guaranteed or your money back. Google +1

Okay, so we borrow to pay for the car but watch carefully because often times you can buy a car at 0% interest. Then think that just because you are able to pay monthly for the car does not mean that is the only cost you will undertake. For it will cost to insure the car, to mantain it to keep it running and did you take into consideration how much you pay for gas nowadays?

So take a look at the car you are buying for you may not need a big car unless you use it to haul a trailer or something. A big car costs more to buy, to insure and to run with the cost of fuel rising to the stratosphere. This is one of the financial mistakes_1 to avoid. Keep in mind these strategies and tips to reach your financial goals. Stay tuned for more tips to avoid making those financial mistakes_1.

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