Repairing Financial Mistakes

Talk to anyone and chances are they have done some stupid things with their money. Take me for example. I got myself into credit card debt to the tune of $10,000. I bought a second car to use as my bike rack for my mountain bike because I didn’t want to dent up my other car. I even wasted $5,000 putting a sound system into a car. Whatever your financial mistakes are, you can fix them with some smart strategies.

In this post, I will walk through a handful of the more common financial mistakes people tend to make and how to fix them.

3 Financial Mistakes To Fix

#1. Not Saving Money

The issue here is that you don’t save any money. I’m not taking just retirement, but any savings in general. Most of us save nothing or close to it. So how do we fix this problem? The simple solution is to save first.

Most of us spend and then save whatever (usually nothing) is left at the end of the month. Change this around by saving first. Set up an automatic transfer from your checking account to your savings account when you get paid.

Start off with $20. You won’t even know it’s gone. Then slowly make it a point to increase the amount of the automatic transfer every year.

You can take this one step further by transferring money when you get any unexpected amount. Whenever I get a rebate in the mail or a gift, I deposit it into my checking account and then transferring it over to savings right away.

#2. You’re In Credit Card Debt

This one will take a little more effort on your end to overcome. Your first step is to figure out why you are in debt. Most likely it isn’t a spending problem but instead a deeper issue. For me, it was depression. Buying things made me feel good. The problem is that the “high” wore off faster and faster which led to more debt.

I ended up sitting down and putting in the work to come to the realization I was depressed. Once I did this, I was able to break the debt cycle.

When you figure out the root cause, you can move on to actually getting rid of your debt. Look at where you are spending your money now and cut back on some things so you can put more money towards your debt each month. It could be eating out less or some other reduction in your budget. Whatever it is, make sure you put the extra money towards your debt.

#3. Bought Too Much House

This one is going to be the hardest financial mistake to fix. You ended up falling in love with the house that was too big for your budget. Now you are stuck barely making ends meet. While you have some options, none are quick fixes.

  • First, see if there is anything you can do to make your house payment not so painful. Can you adjust your budget? This might mean eating Ramen noodles for a short time.
  • Second, you might have to look into getting a second job to help make ends meet. You might even have to cut back and get a job.
  • Third, you could look into refinancing to save some money on your mortgage payment. You could also look into government programs to help you reduce your monthly payment.
  • Fourth, you may want to look into selling your house. Depending on how long you’ve owned it, you might be able to sell and buy something cheaper or rent instead.

Final Thoughts

So there are 3 common financial mistakes and how to fix them. If you are guilty of any of them, don’t be embarrassed. We all make mistakes with money. The key is to acknowledge we went wrong and to go about fixing the mistakes so they don’t continue to hurt us for years to come.

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