5 Financial Mistakes and How to Fix Them

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financial-mistakes1There are lots of mistakes that people make with money. If you total up all of the money that bad financial decisions cost you, you probably won’t believe you even had so much money to just give away in the first place. Here are five mistakes people make with money and some easy solutions on how to fix them.

Missing out on 401(K) Match

By not taking advantage of your employer’s offer to match the contributions you make to your 401(k) retirement account means you are missing out on the chance to net free money. It’s as simple as that. This is no small sum you’re passing up on: if you are contributing the minimum to your 401(k), the amount of money added into your account by your employer could add up to over a hundred thousand dollars.

Solution: If your employer is offering a matching program—not all of them do—you should be taking advantage of it. Start contributing to your 401(k) in a way that will get your employer to match your savings.

Digital Entertainment

It’s so easy to click a button and buy that movie everyone told you to watch, or to download that book you heard so much about. The problem is that the amount of use you get out of that product (around two hours for a movie, probably a few weeks longer for a book) hardly justifies the impulse click that cost you around twenty dollars.

Solution: Look for public domain books and old movies you can stream online. Also, another entertainment avenue to consider is video games. A new video game release may cost $60 but it can provide hundreds of hours of play time—sixty dollars worth of movies would only offer about six hours of entertainment.

Lunchtime

Have you ever calculated how much your lunch is costing you a year if you are paying for prepared food every day you go to work? Depending on your food options, your lunch could be costing you thousands of dollars a year. The total amount of money you spend on food during your work day can add up to even more if you buy multiple coffees or snacks throughout the day.

Solution: Brown bag it. Bringing a lunch that you make at home can save you hundreds, maybe even thousands of dollars a year. Cutting back on the snacks and coffee will also make you healthier.

All Your Nights Out on the Town

Going out for dinner is one of the best ways to spend time with your friends. Unfortunately it’s not one of the best things for your bank account. If you go out to eat once a week, you will end up spending thousands of dollars every year.

Solution: Invite friends over for dinner instead of going out to eat. It’s more intimate, you’ll spend less, and you can show off your cooking skills for everybody.

Gift (to the Company) Cards

How many times have you received a gift card as a present, slipped into a drawer for safekeeping and then forgot about it? Every year one billion dollars in gift cards are never redeemed. Think about that. One billion dollars.

Solution: Use gift cards as your budget for gifts by putting gift card money towards gifts you need to buy other people. Or, just wrap the gift card back up and hand it over as a regift.

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