Monetary Mistakes That Could Be Costing You Big

At this point we all pretty much know the basics of what good personal finance looks like: less debt, more savings, planning for the future. Many times following these deceptively simple principles seems to be going well until life interrupts and deals you a blow. While it’s true that many financial hardships are mostly unavoidable, there are some instances where your biggest monetary enemy is actually you.

Recently Money highlighted some cases where you could be hurting your finances more than anything else. Topping their list is never looking at your credit reports. Even if you think you know what your report contains and what your overall credit score is, the fact is that fraudulent activity or errors could be present on your report and damaging your score. Although these issues may not be your fault, it is your fault if you let them persist simply because you didn’t bother to look them over. Remember that you can review your credit reports for free once a year by visiting AnnualCreditReport.com.

Next on the list is consistently moving debt around. First let me clarify and say that that moving a credit card balance to a 0% interest account or tackling your debt with a consolidation loan could be very beneficial. However the problem is when you abuse these options instead of actually making substantial payments. In order to effectively use those tools you need to not only move your debt to the lowest interest rate option but to increase the amount you pay in order to eliminate your debt before your low rate expires. Additionally keep in mind that those balance transfer offers often incur a transfer fee and so just moving your debt certainly isn’t helping to erase it.

Another harmful habit is what is referred as “yo-yo debt dieting.” This is to say that you make a concerted effort to trim your spending and reach your financial goals only to slip back to your old ways soon after achieving your original goal. As John Rosenfeld of Citizen Bank told Money,”Using credit while you’re trying to pay off debt isn’t going to get you very far.”

Some of the items on Money’s list are pretty obvious such as “letting bills go unpaid” but others might not be so apparent to some. For example setting too many financial goals at one time could actually be a bad thing. Concerning yourself with the numerous financial elements you’ll want to correct can often be overwhelming and discouraging. Instead it’s better to focus on fewer items at a time so that you can see your progress and know that you’re taking a step in the right direction.

While many of us would be inclined to chalk our financial failures up to the unfair events of everyday life, the truth is that your own action could be doing more harm than you realize. In fact you could actually be your own worst monetary enemy. Luckily by realizing the errors in your ways and making adjustments to your personal finances you can start to turn things around.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

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