Mistake #2: Late payments
Whether it’s your credit card or a utility, you likely will be charged a late fee if you don’t pay that bill on time. Start by noting when payments are due on your calendar so it’s easier to remember them. If you don’t have the cash on hand when the bills come, contact the companies to see if your payment deadline can be moved to a few days after your paycheck arrives. If you can’t afford your payments, it’s a good idea to call your creditors. Explain your situation, and see if you can work out an arrangement that allows you to make smaller payments over time. If you often find yourself scrambling to pay your bills, review your budget to determine ways to lower your spending. Late fees are unnecessary expenses, so it’s worthwhile to take some time to determine how you can avoid them.
Mistake #3: Not saving
No matter what your age, it’s always a good idea to set aside a little money in an emergency fund that will cover unexpected expenses, a loss of income, or another unpleasant surprise. Likewise, saving for retirement is important, and it’s never too early to start. Saving is easier when you arrange to have a set amount deposited into a savings account each week or into a retirement account. You’ll be surprised at how quickly your money grows.
Mistake #4: Short-changed on retirement dollars
Did you know you can miss out on significant retirement income by retiring too soon? Retirement age for collecting full Social Security payments is between 65 and 70, depending on when you were born. If you retire before then, you will receive less than your full benefit for your lifetime. Your marital situation and other financial circumstances will also affect your retirement decision, so be sure to turn to your CPA for guidance.
Mistake #5: No plan
Many of life’s milestones can be very expensive. Buying a house, having a child, changing careers, sending children to college, or entering retirement all have a profound impact on your financial situation. If any of these steps are in your future, be sure to begin preparing financially as far in advance as possible.
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