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Money, Money, Money - 10 Mistakes to Avoid

8/25/2011 10:57:17 AM

Money, money, money.

Few things in life generate as much interest yet demand more responsibility. And while money itself will not bring happiness, mismanaging it can surely ruin a peson’s chances  for success and cause a lot of UNhappiness.

The principles of wise financial management aren’t that tough to master. You simply need to know the basics and abide by the disciplines and key principles. It also pays to understand and avoid these ten most common financial mistakes:

  1. failure to set goals and plan for major purchases and retirement
  2. spending more than you earn and failing to budget and monitor expenses
  3. incurring too much debt, including excessive credit card usage
  4. investing too little and starting too late
  5. incurring significant fixed expenses that can’t be reduced in difficult economic times (e.g., spending too much on housing and cars)
  6. ill-timed investment decisions (“buy high, sell low” habits and market timing)
  7. poorly diversified investment portfolios (overly concentrated in high risk stocks)
  8. impulse buying and lack of value consciousness when shopping
  9. inadequate financial knowledge 
  10. lack of discipline and personal responsibility    

We all need to keep these principles in mind both now and in the future. Periodically review how you’re doing in each of these areas, and encourage the young people in your life to do the same.

If we can all successfully avoid these traps, we’ll be in excellent financial shape!

What are some ways you've learned to avoid--or overcome--costly money mistakes in your own life? Do you ideas for passing these principles on to young people? Please share your suggestions and comments below.


Tagged as: finances, financial literacy, net worth, debt, wealth, life skills, spending, budgeting, college graduation rates, college prep, teens, parenting

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