What Are Some Common Financial Mistakes?

What are some common financial mistakes?Any Owings Mills, Maryland financial advisor can tell you that managing your finances wisely is key for a number of reasons. Whether you are living paycheck to paycheck, or have more significant financial means, it’s important to make smart decisions regarding how you will spend your money. Even people who draw a comfortable salary make poor financial moves that cost them. Facing mounting debts can quickly become overwhelming and unmanageable. At CIC Wealth, we work with clients in all financial brackets, helping them to plan for the future by taking action now. Here are common financial mistakes people can make:

Mistake #1 Overspending

One of the biggest reasons people put themselves into debt is by frivolous, unplanned overspending. Many fail to consider that ancillary spending can add up over time. It’s important to take steps to have awareness of areas in which you are overspending so that you are able to avoid this common mistake. For example, purchasing a coffee every day adds up over time and, ultimately could go towards something else like credit card debit or student loan payments. An Owings Mills, MD financial advisor can review your spending habits and offer tips on where it may be possible to cut back.

Mistake #2 Too Many Monthly Payments

Have you considered where your money goes each month? Some monthly payments can easily be eliminated and help to save money in the long run. Things that have no end such as gym memberships, monthly apps for your phone, or cable bills may be the first thing to cut out of your monthly expenses. Carefully review your current monthly payments to determine which things you can live without.

Mistake #3 High Interest Credit Cards

Whenever possible, avoid using a credit card unless you are absolutely sure that you will be able to pay it off each month, or at least quickly. It can be tempting to use a credit card to make purchases. However, this can be a pitfall even for the most financially savvy American. Utilizing a credit card, especially a high interest one can be dangerous and in the long run, costly.

Mistake #4 Not Living on a Budget

Budgets are important for almost all Americans today, even for those who draw a healthy salary. Failing to live on a budget can result in overspending and making poor financial decisions. Take the time to sit down and evaluate your expenditures each month. Preparing how much you will spend each month and how you will pay down your debts can be a good way of taking control over your finances. Failing to create a budget and set financial goals can be disastrous. A trusted Owings Mills, MD financial advisor can help you to create a budget that works for your goals and objectives.

Mistake #5 Purchasing an Expensive Home

Although you may be approved for a mortgage of a certain amount, you will want to make sure that it is something you are actually able to afford. No one wants to commit to a loan that they are unable to afford. There is more maintenance to consider than just the mortgage payment. As a homeowner you will also need to consider insurance, utilities and upkeep. Prior to purchasing a home, take the time to review your budget to determine exactly what you are able to afford without becoming house poor. You can also consult with an Owings Mills, MD financial advisor who can review your finances in total and advise how much home you can actually afford.

Mistake #6 Not Working with a Financial Advisor

Some people may try to create a financial plan on their own, but for many reasons may fall short. They may not have enough time to devote to researching investments, and they may lack the knowledge to execute a reliable plan. At CIC Wealth, we take a holistic approach with our clients, designing a custom strategy built on your income and goals. Along the way, we educate you about the investments because together we are a team. We believe it is transparent, long-term relationships that deliver success. When you are ready to speak with an Owings Mills, MD financial advisor that you can trust, call CIC Wealth.