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5 Money Mistakes You Might Be Making (How to Avoid Them)

submitted on April 25, 2010 by midget in "Member's Lounge"

Money Mistake #1: My Money Is Disappearing

No one starts the month planning to fritter away a small fortune, but that’s what can happen when minor expenses spiral out of control. It’s not just shopping at Saks that gets you into trouble. Seemingly innocent purchases — $15 jeans at Target, a few things for the kids at a two-for-one sale, the occasional Frappuccino — can do real damage to your bottom line.

Money Mistake #2: I Throw Away Cash

Who would pass up free money? Maybe you, if you make only the minimum contribution to your employer’s 401(k) savings plan — or opt out of the plan on the grounds that money is tight. According to the 2008 Wachovia Retirement Survey, only about a quarter of women with 401(k)s contribute the maximum allowed. Puny 401(k) contributions mean you aren’t taking full advantage of any free matching funds your company offers. Says De Baca: “If your boss offered to add $25 to your weekly paycheck, would you turn it down? Of course not.” Most employers match all or part of the first 3 to 6 percent of pay employees contribute.

Money Mistake #3: My Kid’s Budget Runneth Over

Many parents find themselves wrestling with financial discipline when it comes to their children, says Galia Gichon, creator of “My Money Matters” Kit, a box of financial tips and workbooks. Whether it’s snacks for the little ones at the market or new skate shoes for your tween, “it’s amazing how quickly saying yes can add up,” says Gichon, a New York City financial planner and mother of two.

Money Mistake #4: I Never Saw a Windfall I Couldn’t Spend

Whether you receive a raise, a tax refund, or a generous birthday check from Aunt Dotty, it’s hard not to view a windfall as an excuse to go shopping. Splurging can be fun, but that’s rarely the best use of your extra cash. “Few Americans are saving enough to cover day-to-day crises, never mind the future,” says Jonathan Pond, author of Grow Your Money!

Money Mistake #5: I Forget What I’m Worth

If you’re a stay-at-home mom or you work part-time, you may not have enough life insurance. Many women are under­insured because they’ve under­estimated their income or the value of their contributions to the household. De Baca recalls one client whose wife died in her 30s and had only a $100,000 life insurance policy, which didn’t cover the need for child care for the couple’s young children or the housekeeping chores the client then required.

  • 60215
    Posted by webbyone2010 on April 25, 2010
    [reply] 7 0
    This article is a good reminder to take a financial inventory sooner rather than later.
  • 60218
    Posted by outcastplo313 on April 25, 2010
    [reply] 5 1
    Mistake #4 is all me. I'm the worst when it comes to extra money.
  • 60219
    2 11 9
    12 9 2
    Posted by siggy38 on April 25, 2010
    [reply] 3 0
    sorry outcastplo313, that was suppose to be a positive vote on your comment. Red Face
  • 60241
    Posted by YanBz on April 25, 2010
    [reply] 2 0
    I love this kind of advice. This is why Buxr hosted Money Stories Carnival last week which I encourage you all to check out (if you have not done so)

    A ton of interesting stories, most first hand. If you don't have the time to read all, check out the Editor's Picks. These are the best of the best Smile

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