Financial Mistakes That Will Make You Poor

Financial issues are very easy to get stuck in. This is due to the fact that they are often caused by one-off mistakes with long-term effects. With the lack of financial education in our school system, people may not even know they are making bad choices! There are a lot of different environmental factors that play into all this. Due to this fact, I am not trying to accuse anyone of being irresponsible or dumb. This article is meant to be informative, and to address where you may have gone wrong, or will go wrong in the future. So, getting familiar with this list will ensure you can avoid these financial mistakes and get on a better path.

1. Eating Out Too Much

Let’s start with the one you have probably heard before. This one is simple: eating out costs a lot more than making food at home. Even if you feel like you go to pretty cheap places, the trips add up and pull a lot of the extra money out of your budget. This leads to you neglecting other important financial goals, like saving and debt-reduction. This can easily be avoided by meal prepping for lunches, grocery shopping with a specific meal schedule in mind, and limiting restaurant trips to date night.

2. Having a Car Payment

This is one of the most common financial mistakes I have seen. If you are even remotely close to financial trouble, you should not have a car payment. While it may seem enticing to grab a new car, or newer used one, you shouldn’t. Even if you mean well, and have reliability on your mind, there are still ways to get more bang for your buck and avoid debt. Having a car payment doesn’t just mean having yet another payment each month, but also often means paying more for full-coverage insurance. Newer cars also cost more to fix, so you add costs in several ways by having a car payment. Instead of making this mistake, you can check your local listings for a cheap car that you can afford with cash. Check out the read more section below for two articles on great reliable cars you can get for only a couple thousand dollars.

Paying Minimum Credit Card Payments

Most Americans that are having financial issues have credit card debt, and it can kill. Credit cards often hold extremely high interest rates, and keeping balances can leech your income quite a bit. Having savings seems like a safer way to live, but if you’re in debt, take care of that first. Every penny that you pay off of your credit balance will be available for you in an emergency, so there is no downside to eliminating interest payments by paying your debt off completely. People who avoid this will stay in debt, and the extra interest adds up quite a bit over time.

Read More:

• 5 Good Budget Cars Under $3,000
• $1,200 Cars You Can Buy With Your Stimulus Money
• Should You Focus on Paying Off Debt or Saving?

Trey Larocca

Trey LaRocca is a freelance writer, financial sales worker, and tech guy. When he isn’t out and about or at work, he’s usually at home enjoying some video games and a beer. Currently residing in Newport Beach, this California Kid can be found at the beach on any given weekend. Trey has years of experience in day/swing trading, financial analytics, and sales.