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Fixes For Money Mistakes

Fixes For These 10 Money Mistakes


Everyone makes mistakes. Business Insider shares solutions for some common money mistakes people make.

Recently, two friends confessed they live check to check — a revelation worsened by the fact that they only check their bank balance once or twice a month.

RELATED: How This Writer Clawed Her Way Out of the Black Hole of Debt

We called in the finance experts, and here's what we decided they should do to get on track.

"I check my balance once . . . every two weeks."

The mistake: The more we rely on our debit cards, the easier is to go over budget — and risk having our bank misorder the charges to slap us with overdraft fees. It's the reason my friend keeps paying $39 for that Starbucks latte.

The fix: Get in the habit of checking your bank balance morning, noon, and night, says financial expert Farnoosh Torabi. "Rather than compartmentalizing into a once-a-month chore, make checking statements a habitual, daily thing."

"What, my bank offers an app?"

The mistake: Ignoring your balance can make you "forget" about incoming bills and checks waiting to clear, and not using your bank app is careless.

It also keeps you out of sync with your money, something you don't want to do in an era of rampant identity theft.

The fix: Download the app!

Read on for more.

"The idea of a budget makes me feel nauseated. And scared."

The mistake: Where do we start? You can't stop blowing money — much less put any away — until you know what you're working with.

And if you think a budget is boring, trust us — it's not. Planning vacations is very rewarding.

The fix: Start by tracking what you spend in every category (groceries, clothes, etc.) for about a month, then assess what you need vs. want, says Stuart Ritter, a financial planner with T. Rowe Price.

Once you've identified what can go, you'll know how much cash to put toward monthly expenses and save the rest for long-term goals.

"My rent is too damned high."

The mistake: Spending too much on rent is easy to do in a city like New York, but the outlandish costs could keep you trapped in the check-to-check cycle — a dangerous thing since it'll keep you from shoring up money for financial emergencies like job loss or illness.

The fix: Ask yourself if the place is worth it — does it make you happier or does it add to your life? — or if it's eating your discretionary income.

The fix might be as easy as downsizing or finding roommates to help split the bills.

"I like to splurge on the good life."

The mistake: Your 90-year-old self just called. She said you just blew your retirement on $200 shopping sprees each month and $50 meals five to six nights a week.

The fix: Learn to treat yourself frugally. Whether that means savoring the small (free) things, or splurging consciously, your future self will thank you.

"I eat out constantly."

The mistake: This is a total budget killer. But don't take it from us — just ask our friends who said they blow between $10 and $20 on meals each day.

The fix: From learning how to cook and storing food to packing a lunch that you'll actually eat, there are plenty of ways to solve the problem.

Check out these bento box lunches to get inspired.

"I never make sure my checks clear — I just hope for the best."

The mistake: Floating checks, or writing a check before the money posts to your account, is a very bad move, says Andrew Schrage, founder of MoneyCrashers.com.

The check could bounce, and you'll get hit with annoying fees. "Gaming the float" is also getting tougher to do, as banks clear their checks faster these days. Plus, according to consumerist.com, it's illegal.

The fix: Set up automatic bill pay via your bank's online site or your utility provider's. Not only will everything go through on time, you won't have to worry about overdrafts.

Most transactions can be set up to only withdraw available funds.

"I rarely plan for big expenses."

The mistake: Aside from the embarrassment of having your debit card declined, you risk going under and not being able to cover monthly expenses.

Getting hit with late penalties isn't pretty and can drag down your credit score, leading to all sorts of headaches.

The fix: Open separate savings accounts with an online bank like ING, which lets you keep several at once.

You can track your savings progress at a glance and automatically deduct what you need from each paycheck.

"I find that in order to be social, you have to spend money."

The mistake: "Peer pressure is so rampant in your 20s, but as you grow older, your time gets more precious," Torabi says.

Your friends' money values may not align with yours, and soon you could find yourself splurging on things (brunch, booze) that don't matter to you in lieu of what does.

The fix: "Mind the company you keep," says Torabi, whether that means making friends with similar values, or ditching the ones who tempt you to overspend.

Otherwise, suggest fun (and free) activities and don't be afraid to stay in once in a while!

"I don't have enough money to worry about money."

The mistake: "The idea is to build a balance so you don't have to pay attention to your money," says Adam Koos, wealth planner with Libertas. But until you get there, you should worry about your money.

The fix: Switch to cash, which will help you realize just how much you're frittering away with each paycheck.

Likewise, start siphoning a chunk of each paycheck toward your savings to be put toward emergencies (and investments down the line). That balance will balloon before you know it.

Check out these smart stories from Business Insider:

Twelve Millennials Reveal How They Got Hooked on Debt

Eighteen Napkin Sketches Will Teach You Everything You Need to Know About Saving Money

Three JPMorgan Execs Expected to Leave This Week Following $2 Billion Trading Loss

Krugman: Here's How the Whole Eurozone Could Unravel in Just a Matter of Months

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