• Home
  • About
  • Advertise
  • Contact
  • Policy
  • Guest Post
  • Archive

One Cent At A Time

A Personal finance blog to get rich

  • Email
  • Facebook
  • Pinterest
  • RSS
  • Twitter
  • Beautiful Life
  • Becoming Rich
  • Beginners Guide
  • Extra Income
  • Productivity
  • Saving Money

Common Financial Mistakes to Avoid in Day to Day Life

May 29, 2013 26 Comments

Share this:

  • Tweet
  • Email

To date my biggest financial mistake was not to diversify stock market investment. I did invest all my stock money in one stock, eventually the financial giant got vaporized along with all my investments. We all commit some kind of a financial mistake in our life. This article from guest poster Joshua should make you cautious and little bit more aware to not to commit a major financial mistake. Enjoy the post!

Financial Mistakes

You work hard for your dollars as do I. When we make financial mistakes, those hard earned dollars seem to fly right out the window. Even worse, often times, we don’t even know that we are actually making a mistake at all. Therefore, even though you make a pretty good living, you may still feel like you are constantly in the red. Here are some of the most common financial mistakes that consumers make and what you can do to avoid them…

#1 Mistake – Overuse Of Credit Cards 

When used properly, credit cards make for awesome financial tools that can help you on your journey to financial stability. However, if you don’t use them properly, you could find yourself in a very bad financial position. The worst part about this is that, although credit cards are important in some ways to a financially stable lifestyle, there is no middle or high school course that I’ve ever heard talking about them.

That being said, when most of us get our first credit cards, we look at them like a great way to get things that we couldn’t afford yesterday. When the first one is close to an uncomfortable balance, we often go after another. This revolving process eventually leads to financial hardship for many people.

How To Avoid Overuse Of Credit Cards

The key here is limiting the amount of credit cards you have and what they are used for. I generally advise my clients to have 2 credit cards at most. The one with the lowest interest rate would be the card that’s used for large emergency purchases because holding a balance there won’t cost as much as holding a balance on the other card.

The second card is for the security credit cards offer in day-to-day purchases. This would be your rewards credit card ideally. Of course, the day-to-day purchase card would be paid off completely on a monthly basis. The day you can’t afford to pay off the day-to-day card, you realize it’s time to cut back on spending and get your finances in order.

(Related – When Should you Use a Credit Card?)

#2 Mistake – Food Waste

We often see CNN specials talking about how much food Americans waste annually and, it’s astonishing to see the totals. That food waste often equates to thousands of dollars annually in some households.

How To Avoid Wasting Food

What works for me is a pay period shopping day with an iron clad list. I admit, I used to be one of those shoppers that would go out whenever I thought I needed something. I’d go to the store for milk and come out with $50 worth of food that I didn’t always eat.

(Related – Tips To Stay Away From Impulse Buying)

About a year ago, I started to realize how much money that was really costing me. I did some math and noticed I was easily spending $450 per month on food. That just didn’t make sense. Now, I shop the day after pay day.

Before I go shopping, I make a list of everything I might need until the next pay day. This way, I don’t make frivolous purchases on those extra trips during the week and I have everything I want. Now, I eat like a king, waste very little and spend about $200 per month on food!

Another thing I did to save money on food is change my eating habits all together. I used to love shopping in the inner aisles of the store. However, I found out that just about everything in the inner aisles of the store could be made with the fresh items you find in the cold wall aisles of the store.

Not to mention, because it takes money to prepare the items you find in the center aisles and money to package them, it is more often than not much less expensive to make what you enjoy right at home.

(Related – Some reuse of Fruit Waste at your Home)

Mistake #3 – Not Budgeting

Believe it or not, majority of American households do not run on an active budget. Yes, they like to have a little savings and try to make their payments for everything on time but, without a budget, many people often waste quite a bit of money that could be used in very productive ways.

How To Avoid Being Bit By The Decision To Avoid Budgeting 

The bottom line is, to live a financially stable lifestyle, you are going to need a budget. The good news is no matter how much income or how many expenses you have, making a livable budget shouldn’t be much work.

I prefer to make spreadsheets that cover my monthly expenses, debts, income sources and my savings and debt relief goals. I recently wrote a guide to making the budget spreadsheet that I use. Please feel free to read the guide and get yours started! Also, here are some budgeting Tips from SB.

(Related – How to Stick to Your Budget Consistently)

Mistake #4 – Not Monitoring Credit Reports

Your credit report is one of the most important reports you will come across in your life! Although the number of consumers that are monitoring their credit reports continues to grow, there are still tons of people who have absolutely no idea what is being reported with their name and social.

Not knowing what is being reported could lead to inaccuracies on your credit report or, even worse. If you don’t monitor your credit report you will not be able to act quickly in matters like identity theft.

The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months – Federal Trade Commission

How To Get, Check And Monitor Your Credit Report 

Don’t worry, I didn’t write this article to try to get you to sign up for a free trial of some free credit report website that you have to give your credit card number to get! The truth is, your credit report is free once a year from each credit reporting agency.

Although, not all reports will be exactly the same across the board, they are generally pretty similar. That being said, unless I notice an inaccuracy in the first report I pull, I request a copy from each one every 4 months. This way, I know exactly what is going on 3 times a year!

Getting your credit report is pretty simple, go to www.AnnualCreditReport.com and follow the steps to requesting a copy of our credit report. Once you get your report, the important part is taking the time to read every word on it. In most cases, you will find that your credit report has more information about you than you thought. If you find any mistakes in your report, you should dispute them right away.

To dispute a remark on your credit report, simply go to the website for the reporting agency that is reporting the inaccurate information. Once on the website, look for instructions on how to dispute inaccuracies.

Final Thoughts

These are all financial mistakes that are made by several people each and every day. However, in most cases, these mistakes are made as a result of lack of knowledge that they are even making them. I hope that my article has made you aware of important aspects of obtaining financial stability. If you have any questions, concerns or just want to say hi, please feel free to leave a comment below.

About The Author : This article was written by Joshua Rodriguez, proud owner and founder of CNA Finance. Join the conversation with Joshua on Google+!

LIKE THIS POST?
Thank you for subscribing.
Something went wrong.
I agree to have my personal information transfered to MailChimp ( more information )
Join our community of 8000+ subscribers to increase your net worth and build wealth
We hate spam. Your email address will not be sold or shared with anyone else.

Share this:

  • Tweet
  • Email
The tool that changed the way I manage my personal finance - Personal Capital, The Best Free Personal Finance Tool

Want to start a WordPress blog now? The onecentatatime.com blog is hosted by Siteground Web Hosting. For only $3.95 a month, Siteground can help you set up and host your website/blog quickly and easily.

About the Blogger Hi I am SB, a personal finance enthusiast with a career in software development. I am an immigrant to the USA since 2005, after being born and brought up in India. This 40 something technocrat lives and breathes personal finance whenever he gets time from the day job, job as a husband and a dad

Some links on this page may be affiliate links, if you make a purchase following the links, I may earn a commission. Read affiliate disclosure here
« 15 Creative Ways to Earn Money Online From Home
How to Choose the Best Life Insurance Policy »

Comments

  1. [email protected] says

    May 29, 2013 at 8:55 AM

    I’m proud to say I do all of these, although, I hate budgeting. I know it is a necessary evil to identify wasted spending. Too bad there aren’t any more bells and whistles to that process to make it more interesting.

    Reply
    • Joshua Rodriguez says

      May 29, 2013 at 7:31 PM

      Hey Greg,

      There are all kinds of fun ways to make your budget spreadsheet a bit more interesting to work with. You could do things like make graphs to track your progress with debt and savings. Seeing the colorful images make you want to move the line for the next update and often makes budgeting more fun! As a follow up to my recent post, How To Make A Budget Spreadsheet (http://cnafinance.com/how-to-make-the-ultimate-budget-spreadsheet/), Friday, I will be posting How To Make Budgeting More Fun. I hope you swing by to take a look! Thanks for your comment!

      Reply
  2. [email protected] says

    May 29, 2013 at 9:03 AM

    Cooking at home and bringing food to work, etc. helps conserve food funds, as it is hard to avoid spending on outside eating (especially in large cities).

    Reply
    • Joshua Rodriguez says

      May 29, 2013 at 7:32 PM

      Hey Mike,

      Thanks for your comment! I couldn’t agree more!

      Reply
  3. Irfan says

    May 29, 2013 at 10:01 AM

    Great Post. I have been following all these. More important of all is to not let your emotions decide while investing in stock market. Not setting aside money for retirement is also one of the mistake which people don’t follow much.

    Reply
    • Joshua Rodriguez says

      May 29, 2013 at 7:33 PM

      Hey Irfan,

      I couldn’t agree more, after all 30 year 401(k)s pay out much less than 40 year and we only have so long until we retire! Great point!

      Reply
  4. Michelle says

    May 29, 2013 at 10:43 AM

    We used to be super guilty of food waste. Luckily no more!

    Reply
    • Joshua Rodriguez says

      May 29, 2013 at 7:35 PM

      I’m right with you Michelle, I felt like I threw out a cow a year! Now, I’ve done simple things to slow it down and, we’re doing pretty well now. Although, I will admit, we could use a bit more work! Thanks for your comment!

      Reply
  5. My Multiple Incomes says

    May 29, 2013 at 11:57 AM

    Most financial mistakes start from overusing the credit card. People should still learn to budget their spending even though they are using a credit card.

    Reply
    • Joshua Rodriguez says

      May 29, 2013 at 7:36 PM

      Hi MY Multiple Incomes,

      I agree. Overuse of credit cards is one of the leading causes of financial hardship. Thanks for your addition!

      Reply
  6. Bob @ Cubicle Sherpa says

    May 29, 2013 at 3:17 PM

    Budgeting in advance is huge for my family.
    Without a budget it’s too easy to justify $50-100 expenses when you only look at them in a vacuum. They all seem reasonable by themselves.

    Only at the end of the month did we realize how much we’d spent in TOTAL. A solid budget at the beginning of the month has helped us avoid this type of ad hoc decision making.

    Reply
    • Joshua Rodriguez says

      May 29, 2013 at 7:36 PM

      Hey Bob,

      Great point and that’s awesome that your budget has helped! thanks for your comment!

      Reply
  7. Little House says

    May 29, 2013 at 6:58 PM

    Food waste is definitely a problem in our house. Instead of having a set menu for the week, we wing it which means buying too much of one thing or not enough of another. Our grocery bill is really too high for two people. I’m on top of most everything else, though. Great list!

    Reply
    • Joshua Rodriguez says

      May 29, 2013 at 7:38 PM

      Thanks for your comment Little House. You’d be surprised how much making a list before you go to the store can do for your bank account!

      Reply
  8. Eric J. Nisall - DollarVersity says

    May 30, 2013 at 10:07 AM

    I’d have to say that monitoring one’s credit on an ongoing basis is overkill, especially if you’re giving suggestions for “day-to-day” life issues. Besides, the real issues won’t show up for sever weeks or months the way creditors report these day (some going as long as 2 month between updates).

    Reply
    • Joshua Rodriguez says

      May 30, 2013 at 10:31 AM

      Hey Eric,

      Thanks for your comment. Although the article is for the day to day basis idea, I agree with you on credit reports. Because you are able to get 1 report per year from each agency for free, I generally advise my clients to go through their credit report with a fine tooth comb about once every 4 months. Thanks again for your comment!

      Reply
  9. Martin says

    May 30, 2013 at 3:35 PM

    Great advice. I have a lot of credit cards, fortunately most of them already paid off and I put them in a bag full of water and froze them on the bottom of a freezer. Actually I put all of them but three on the bottom of a freezer. Three more cards I have a balance paying off and use only three cards for emergencies, as a bridge when I run out of cash (yeap it is still happening to me when I pay all the bills, but as I am paying off the cards, this is occuring less and less). Hopefully I will be able to eliminate my debt completely and stay out of it for good.

    Reply
    • Joshua Rodriguez says

      June 3, 2013 at 7:16 PM

      Hey Martin,

      It sounds like you’ve got a great plan that’s really working for you! Keep it up!!! Thanks for your comment!

      Reply
  10. [email protected] says

    May 31, 2013 at 1:22 AM

    My wife and I have been guilty of #1 and #3 many times in the past. We are trying to finally put our collective financial feet down and stop using the credit cards while sticking to a realistic budget. It is going to be difficult but we are committed to getting ahead and staying there.

    Reply
    • Joshua Rodriguez says

      June 3, 2013 at 7:18 PM

      Zimmy,

      Thanks for your comment! We all learn from our mistakes, without them, we just wouldn’t be us. I’m glad to see that you and your wife have taken the time to pinpoint what may come to be problems in the future and hope your plan for financial stability works out great for you!

      Reply
  11. Savvy Financial Latina says

    June 3, 2013 at 10:48 AM

    Food adds up so quickly! We don’t eat out a bunch. We use to do so a lot more before, but we still spend a lot on food.

    Reply
    • Joshua Rodriguez says

      June 3, 2013 at 7:21 PM

      Hey Savvy Financial Latina,

      There are tons of ways to save on shopping. Some obvious like couponning and budgeting and some are more outside the box like shopping around the edges of the store. I know, what, huh, shopping around the edges of the store? This is where all the fresh foods are. Making your own dinners out of fresh ingredients is a far cheaper way to feed a family than boxed burger patties and pasta. I found that out after doing it for a month and saving over a hundred bucks! Hope that helps you too, thanks for your comment!

      Reply
  12. Anton Ivanov says

    June 5, 2013 at 11:58 AM

    I think another great tip is being economical with your utilities. When I go to some people’s houses – I notice they have all their lights on, their windows open WITH the AC on, water just running for no reason, etc. Getting into small habits like saving electricity and water can actually result in large savings over time.

    Reply
    • Joshua Rodriguez says

      June 5, 2013 at 8:05 PM

      Great point Anton, thanks for sharing!!!

      Reply
  13. Derek | MoneyAhoy.com says

    July 1, 2013 at 4:23 PM

    Food waste is a good one that we are probably all guilty of on some level.

    We have worked very hard over the past year to avoid this. One area that gets my wife is those expiration dates. They are almost always meaningless, but she likes to throw stuff out if it’s past the date. Argh!

    Reply
  14. Pascal Boivin says

    January 12, 2015 at 9:44 AM

    Thank you for sharing the article. It’s very interesting. Hope to hear more from you.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.



Create your own blog in 20 minutes and $20

Personal Capital, a free tool to change your financial health today

I use and suggest Upstart, for your personal loan need

CreditKarma, a free tool to check your credit scorey

I use Coinbase, for my crypto investments

101 Cents at a Time

101 Ways to Earn Extra Money on the Side
201 Frugal and Perfect Birthday Gifts
101 Ways to Save Money Everyday
101 Ways to be Better and Successful at Work
101 Ways to Save Environment and Energy
101 Frugal and Romantic Anniversary Ideas
101 Low-Cost Men's Fashion Ideas
101 Personal Finance Tips
101 Ways to Reuse Household Stuff
101 Things to Do, When Nothing to Do
101 College Graduation Gift Ideas
100 Tips for Ecommerce Startup
101 Ways to Enjoy Indoor During Winter
101 Ways to Beat Procrastination

Popular Posts

Quick Cash - How to make $100 legally, in a day
Living well on less than $15,000 a Year
Top survey sites for side income
What to do when auto repair goes wrong
Where should I invest my money now?
20 Ways to be productive and happy at work
51 Ways to get out of debt
Be a better person in 15 days, 15 ways
Income ideas for retirees and senior citizens
51 side jobs for college students
Urgently need a large amount of money?
Should I buy or should I rent?
Best Personal loan providers
25 Ways to save environment
25 DIY car repairs to save money
How to decorate office cubicle
How to show your wife you care
50 Financial Rules for Success
51 Frugal weekend family activity ideas
Become Rich By Saving 1 Hour Of Daily Wage
How much do I need to save for retirement?
How to negotiate your salary

Follow us on FaceBook

About Author

SB

Blogger by choice and IT manager by profession. Finance is my passion and gardening is my greatest satisfaction. Born in India, settled in US, Husband and a father. I created this blog in 2011 with a vision to help others. Thanks for your patronage. More info on my "about" page.

View all posts


Subscribe

Join our community of 5000+ subscribers to increase net worth and build wealth

Advertisements

Personal Stories

How I got a new HP computer replaced
Was COVID circulating in USA in fall of 2019?
How my credit score went up 800+
Why I didn’t invest in Bitcoins
How I controlled impulses to buy things
Why this blog is named One Cent at a Time

Subscribe via Email

Site Disclaimer

Disclosure of Material Connection: Some of the links in this web site are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”
Read full Affiliate disclosure


One Cent at a Time is published by SB. The opinions expressed herein by him are his own and not those of his employer or anyone else. All content on One Cent at a Time is for entertainment purposes only. By reading this blog, you agree that SB and/or One Cent at a Time is not responsible for any actions taken after reading this blog. For the full disclaimer, click here .

Major Media Mention

One Cent at a Time Media Appearances

Copyright © 2023 One Cent At A Time · Designed by Nuts and Bolts Media