Friday, July 22, 2016

Protecting Your Finances: 6 Ways Bad Decisions Can Drain Your Wallet

When you work hard to boost your savings account, the last thing you want is to have to spend it unnecessarily. The following are six common reasons why people are forced to dip into their funds due to poor planning and bad decisions.

Maintaining a balance on your credit card

We're often advised as young adults to use a credit card periodically to build up a credit history. While this is good advice, some people pass along the myth that it's necessary to maintain a balance on the credit card to achieve this. 

If you believe this untrue myth, there's a chance that you've been paying way too much due to interest on your balance. Paying off your full balance every month will keep help you avoid paying out completely unneeded fees to the bank.

Buying cheaply

When it comes to cars, appliances, clothing, shoes, and so much more, buying the pricier option can result in more savings down the line. Cheap shoes must be replaced every year, but an expensive pair might last ten. 

Energy efficient dishwashers and furnaces have a higher price tag but earn back their price in how much they lower your utility bills.

Driving while intoxicated

Drunk driving is unfortunately very common around holidays and on weekends. Not only is it dangerous for yourself, your passengers and others on the road, but if you get caught and charged with a DUI you could lose a lot of money to fines. 

If you find yourself with DUI charges, it’s important to talk to Toledo, OH criminal defense lawyers. Legal experts can help ensure the best possible outcome, which can save a lot of money in the end.

Withdrawing from your savings account

Savings accounts are a great cushion for unforeseen disasters. Once the balance gets to a certain amount, it's tempting to use that money for a trip or a large purchase. Resist the urge to withdraw your funds and keep contributing. The future you will thank you.

Not tracking your spending

It's easy to spend a little here and a little there. When it all adds up, splurge purchases might make up a surprisingly large portion of your income. Without income tracking, there's really no way to tell, so start saving those receipts and analyzing where your dollars go.

Only paying the minimum on debt

Meeting the minimum payment on a loan month after month is admirable, but if you're able to increase the amount you put aside even by 10%, this will reduce the amount of interest you end up paying on the debt, and you'll pay it off faster, too.

If you have the funds, it's worth it to increase your debt payments as much as possible so you can become debt-free sooner with the more flexible cash flow that that entails.

Don't neglect your wallet. Help it grow with good financial habits, and enjoy the benefits that having more money can bring.

1 comment:

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