Politics, finger pointing, job scarcity, global economic worries, domestic worries – the problems are many. President Obama says Congress needs to sign more bills into law.
The Republicans say the Obama Administration is out of touch and the recently passed Supreme Court ruling on the health care bill is the final nail in the proverbial coffin. It’s confusing, frustrating and is causing a divide in this country that this generation has never seen before. Tax the wealthy, make big business pay more, cut unemployment: it never stops.
While we might not can “knock heads” in DC, there are things we can do in our own households. Making strong financial decisions is a proactive approach to offsetting the nonsense that’s going on around us. So, with that in mind, we explored some of the most common mistakes people make with their finances. From opening a new credit card account to transfer a past due balance on another card to tackling confusing tax codes, we all have our “ut oh” moments.
Bank Fees
Even if you do beat the odds a few times, sooner or later, a check is bound to hit your bank before you’ve had a chance to make that deposit. NSF fees are expensive – sometimes $50 or more. Then, after you’ve settled the fees with the bank, you might still face fees from whomever the check is made out to. It’s a huge risk many Americans take on a daily basis, but that one gamble can potentially affect you anytime you open a new bank account in the future.
I’ll Cross that Bridge Later
How many times have we caught ourselves thinking “one crisis at a time”? Retirement is important, but when you’re thirty years old and facing financial difficulties, it’s easy to think,
I’ll stop contributing for a few months and then make it up later. I have plenty of time.
Most employers are matching contributions and if you stop contributing, your employer will too. It’s money tossed away when you think about it. The fact is, you won’t find any financial counselor worth his salt who will encourage you to push it aside for any period of time.
What you might be encouraged to do, though, is seeing what your 401k can do for you in the here and now. For instance, did you know you might be able to take out a loan against your retirement fund? You’ll need to check with your employer since no two plans are ever the same. It might be a viable option that will allow you to continue adding to your fund while also providing access today for what’s referred to as a hardship need.
Bulking It
Everyone knows the little old lady in the neighborhood who buys toothpaste by the cases because it’s such a great deal. Only problem is, this little old lady has had dentures since Kennedy was in office. Buying it bulk is only good when it’s actually used. We’ve all seen those extreme couponers on television. These folks stock entire rooms with hundreds of toothbrushes and fabric softener – and for what?
It goes bad or it never gets used. While they’re saving big bucks in the process, they’re also having to line everything up perfectly so that they can time their arrival at their local grocery stores in order to get the 15 cases of toothpicks when the truck arrives. Then they must store it. And then they must throw it out after it’s past the expiration date. It defeats the purpose. If you do come across great coupon deals, consider donating to your local food bank or domestic abuse shelter.
Tax Man Cometh
Not quite sure how to calculate how much interest you’re paying on your credit cards? If so, you might be better off leaving it to the professionals – especially when it comes to your yearly tax returns. The few dollars you saving by “winging it” can result in hefty fees later on. This is one expense that’s definitely encouraged. And before you assume the software will accurately calculate your returns, think again. There is plenty of room for glitches and human error and one wrong number can have a domino effect on your tax returns.
Debt Consolidation
Debt consolidation is a fantastic way for some to pull their monthly obligations into a single monthly payment. Before you apply for that credit card with a zero percent intro for balance transfers, do your research to ensure moving your balances to that one card won’t cost you in the long run. Double check the rates after the intro period has expired.
Again, it’s a powerful tool for some, but it’s also easy to make a costly financial mistake too. Give it some strong consideration. Remember, a few hours spent on due diligence can have you hundreds or thousands in interest charges. Don’t let your worries override your common sense.
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