They say that money can’t buy you happiness. While this may be true, and the most important things in life are the people we love and making memories, the truth is that money can bring us comfort.
It can provide a safe place to live, and food in our bellies. It can make experiences possible, and allow us to travel to beautiful places.
So mismanaging this incredible tool that can bring such wonderful things to our life could be disastrous. Sometimes the best way to manage your money is to know what not to do. Here are some of the most important mistakes that you should avoid at all costs.
Not Anticipating Taxes
Some people make big bucks, and assume that it’s theirs for the keeping. However, they forget to factor in tax time when spring rolls around. Remember, depending on your circumstances, you could be required to pay a significant amount during tax season. And claiming you didn’t know you were supposed to pay these taxes could lead to tax fraud which is the last thing you want for your finances.
Making a big salary is only half the battle. You want to make sure that you have an accountant who can help you anticipate you’re owed taxes, and guide you through the right steps on how to prepare for tax season once it arrives.
There are some people who just can’t help themselves when it comes to buying things. They see something they want and before they know it, it’s “added to cart.” However, in many cases these impulse purchases are frivolous and pointless.
Even though they may seem innocent, these small purchases added up over the year can make a significant difference in your wallet. You’re better off reflecting on purchases first. Even just a small $10 a week can add up significantly over the course of the year, so keep an eye on your purchases.
A lot of people forget that one day they won’t be able to work anymore. It’s important that you have a retirement fund put aside to ensure you can look after yourself. Saving money every month is a critical part of her preparing for the future. Savings doesn’t just help you prepare for the future, but it can also help you prepare for the present.
If you find yourself with car problems, or a medical issue, you shouldn’t rely on your credit cards to pay for this. It’s important that you have an emergency savings account to dip into. Ideally, you should put away at least several months of your salary to ensure that you have enough to cover significant emergencies. That way you avoid relying on credit and never ending payments.