Not sticking to a budget.
Creating a budget may sound like a drag, but it’s actually super easy — just follow the 50-30-20 rule:
50% of your money goes to necessities (rent, utilities, health care, groceries, etc.)
30% is for fun indulgences (a new motorcycle jacket, tapas and mojitos with the girls, a weekend trip with your man),
20% is put towards savings and debt repayment (if you have no debt, save the entire amount).
It's easy to find budget helpers on the web, or as an app on your phone!
Splurging on stuff you don’t need.
When you’re faced with a temptation, put it to the need vs. want test. Ask yourself, Do I NEED this? If the answer’s no, then step away from the temptaion! However, if you’re pining for it a few days later, reconsider whether you can make it work into the 30% of your budget set aside for guilty pleasures.
Think you still won’t be able to resist? Try going on a cash diet. Every week, take out just enough money to last you the next seven days, leave your credit cards at home, and only use cash. (But don’t carry massive amounts of money in your purse—take what you need for the day and put the rest somewhere safe at home.) It forces you to regulate your spending so you can make it through until the next withdrawal.
Overdrafting on your checking account.
There’s nothing more annoying than being hit with a ridiculous overdraft fee — even if you’re only pennies over your balance.
You have two options to avoid this:
a) Tell your bank to turn off the overdraft capability on your account, so it’s impossible for you to spend money you don’t have.
b) Check out FindaBetterBank.com—it matches you with a bank with the lowest fees around, and you can set up text and e-mail alerts that let you know when you’re in the danger zone.
Not saving enough money.
Bad luck can strike every once in a while—like losing your job or getting in a car accident. Protect yourself by setting up an emergency savings account. Stash at least 6-9 months of your overall expenses in there so you have a buffer just in case. That way, if something happens, you’ll have a good amount of time to get back on your feet without scrambling for cash.
Forgetting about your Retirement.
Retirement seems so far away, but putting money aside for it now is one of the most important things you can do to set yourself up for later. Find out if your employer matches any contributions to your RRSP. If not, research the perfect RRSP.
Here’s why it’s so key to sign up in your 20s: if you put in $1,000 a year starting at age 25, you’d be sitting pretty on more than $300,000 by the time you’re 65. But if you start at 30, you’d have $200,000, and starting at age 35 lowers that number even more to $130,000, which is serious money to lose out on!
Ignoring your credit score.
Your credit rating is the only grade that matters after you graduate—that number affects whether you get loans, hired, approved to live somewhere, and more. You build your credit by never missing a payment on anything. You can find out your credit score on-line!
No comments:
Post a Comment