Tis the season for ghosts and ghouls, but the real October threat isn’t coming from the graveyard—it’s coming from our checking account! Just in time for Halloween, here are eight spooky financial pitfalls to steer clear of, so you won’t be haunted by past financial mistakes.
Impulse Buying
Make a monthly budget covering your wants and needs, and if you feel compelled to purchase something that’s not in the budget—don’t do it. One trick is to put the impulse item in your online shopping cart or take a picture of it in-store, then give yourself forty-eight hours to consider. Often times, after a few days, the item no longer seems so necessary.
Minimum Card Payments
It’s easy to think that if you’re making minimum payments on your credit card, you’re good to go: no late fees, no problem. However, paying off only the minimum means you are accruing more and more debt every month. Instead, aim to pay off your balance every month. Paying off your entire balance means no costly interest payments, as well as a better credit score.
Predatory Loans
If you’re having trouble borrowing money, it can be tempting to take out a loan with a less-than-scrupulous business. A predatory loan may come with sky-high interest rates, unclear terms and fees, and plenty of pressure from the lender. Instead, work with a reputable financial institution to understand what options are available, including options for people with a less-than-stellar credit score.
Missed Retirement Savings
Do you know what 401(k) options are available at your job? In some workplaces, employees who contribute more money to their retirement fund can have those extra dollars matched by their employer. Ignore this workplace benefit at your own peril! Gaining extra employer contributions is a fantastic way to accrue more money for retirement in a tax-advantaged way.
Risky Investments
Unfortunately, high risk doesn’t always amount to high reward. While all investments come with a level of risk, some investments are a bigger gamble. So, before sinking your retirement account into cryptocurrency or a cyclical industry stock, remember that low-cost investments which passively track the returns of market indexes tend to deliver the best results in the long run.
Ignored Credit Scores
Out of sight, out of mind is not the best strategy when it comes to your credit score. By regularly checking your score, you can gain more insight into your current financial state and what borrowing options you may qualify for in the future. Plus, keeping tabs on your credit score can help you catch identity fraud more quickly.
Not Saving
If you get a bonus at work, or a tax refund, or a sizeable gift for your birthday—what do you do with the extra money? If your automatic impulse is to splurge on something special, you’re certainly not alone. However, saving surplus funds instead of spending them can make a big difference to your future finances: whether you’re paying off debt, starting an emergency fund, or topping off a retirement account.
Subscription Crawl
The creepy crawly critters of Halloween aren’t nearly as frightening as the unnoticed crawl of subscriptions. Many households are paying hundreds of dollars for news, entertainment and other subscriptions, many of which go unused. Take the time to list every subscription you hold, then decide what’s worth keeping and what belongs six feet underground.