By Nell Casey, Go Banking Rates
Good money management is about more than just being able to afford the essentials. It’s about being able to cope with the unexpected and grow your wealth, saving a little more each day.
A man checks the money his wallet. (Photo by: Newscast/UIG via Getty Images)
If you’re worried about your money management skills, the tips below might help you figure out what you’re doing wrong and how to fix it.
Signs You Have Poor Money Management Skills
1. You Carry a Balance on Your Credit Card
Everyone should know by now that credit cards are one of the worst forms of debt. Carrying a balance from month to month, and paying interest, is an easy way to throw your money away.
Yet, despite this knowledge, Americans still love to carry a balance. In fact, one in three U.S. adults carries a credit card balance from month to month, and 15 percent of adults roll over $2,500 or more each month, according to the 2014 Consumer Financial Literacy Survey.
One reason people get hooked on credit cards is because they are chasing points for rewards like flights, gift cards and cash back. But if you’re paying any sort of interest on those cards, then the numbers often just don’t stack up.
The fix: If you do regularly carry a balance, look to consolidate it to a no-frills, low-rate credit card — and then focus on paying it off.
2. You’re Constantly Accruing Late Fines and Overdraft Fees
If you are regularly getting hit with late fines and overdraft fees, it’s a sure sign you aren’t in control of your money. Perhaps you let the bills sit on the kitchen bench, unopened, for weeks at a time. Or you don’t check your bank account balance before going on a shopping spree and accidentally overspend, getting hit with a massive overdraft penalty.
These fees and penalties are such a waste of money, because you get no benefit from the payment. And it’s costing Americans a lot each year, with 24 percent of adults reporting that they sometimes or often pay bills late.
The fix: Have a system whereby you open and schedule bills and other payments as soon as you receive them. And check your account balance before you head out, so you know how much you can spend.
3. You Aren’t Saving for the Future
Sure it’s nice to treat yourself with your hard-earned money today, but if you aren’t putting away even a little bit of your earnings for the future, then you’re going to have a very boring retirement.
With one in three Americans not saving money toward their retirements, this is a money management issue that can have serious long-term consequences.
The good news is you don’t need to put away massive amounts of your income now. The power of compounding interest means that even a small amount saved today can equal thousands in the future.
The fix: Start researching the best retirement option for your finances, then direct a portion of your income to that account — even 10 percent will mean a more secure retirement.
Read the full article HERE.
