Ever you were all your money goes right after payday?
Spending money is way too easy. But savings look extremely hard! It is very simple to save money but though it isn’t something that happens overnight, you need to work on changing a few habits. You might have your first real job and, with it, your first real paycheck. In the excitement of hitting the town every night or shopping for your first apartment, all that money can quickly evaporate, leaving you stranded until the next payday.
Mistake 1: Spending Every Penny
Here's the secret to achieving most financial goals: saving money. But you can't save if you fritter away everything you earn.
Use your dreams as motivation for some of the scrimping that lies ahead. For instance, if saving for a home is high on your list, that goal should get priority when it comes to your disposable income.
You probably have more opportunities to cut back than you realise
For example, instead of splurging on lunch at work because you have a few extra bucks, bring a sandwich from home and save the difference.
In order to make this work, you have to know how much you earn and how much you spend. Don't get nervous: Meticulous budgeting may not be necessary. Fidelity developed a 50/15/5 rule of thumb that can be used as a starting point.
Consider the following when thinking about saving and budgeting:
No more than half of an investors take-home pay, 50%, should go to essential expenses, including housing, food, utilities, and other regular obligations.
15% of pretax income should go to retirement savings—including the company match.
5% of take-home pay should go to short-term savings.
Whatever is left is spent however the investor chooses.
Mistake 2: Using Credit card rather than cash
A Credit card is something useful to have in hand because apart of having rewards point and the convenience , You also have the security that ever you lose your credit card , It can be easily replaced which is not in the case of cash. . However the trade off with credit cards is that it’s easier to overspend, which can lead to debt problems in the future.
With the convenience of a credit card, it’s easy for people to buy things they don’t necessarily need at prices they can’t afford. And if someone doesn’t pay off their credit card balances every month, not only will they accumulate debt with high interest charges, but this could eventually hurt their credit rating as well.
The solution? Learn to shop with cash, but keep a credit card for those big purchases you know you can pay off.
Mistake3: Retirement saving
You Must Save 15% of you’re earning because it is important save of your future- No matter How Young or How Old you are?
When you’re young and you’ve just started out on your career, saving for retirement may be the last thing on your mind, when in fact doing so is just one of many money mistakes to avoid. It’s tempting to spend your hard earned money on things you can enjoy now, but in another 30 years or so, all those vacations you took and those expensive restaurant meals you enjoyed aren’t going to help you pay the bills when you’re retired.
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