Financial Ghosts: 5 Money Mistakes That Haunt People Every Fall

The spooky season is upon us, and while fall frights can be plenty of fun—this time of year can also bring up some truly terrifying money mistakes. Read on to learn about the most common money mistakes which haunt people every autumn plus a few tips on how to avoid them.  

Letting High-Interest Debt Linger  

Like a Halloween ghoul, the specter of high-interest debt is a haunting presence you don’t want in your life. To exorcise high-interest debt, it’s critical to go beyond minimum payments. Remember: high-interest debt is different from paying off a mortgage. Your payments don’t stay the same over time and there isn’t an end date. Instead, your debt continues to grow every month due to compounding interest. It’s a wise idea to divert funds from spending, and even saving, in order to get high-interest debt purged from your life once and for all.  

Dipping Into Emergency Funds 

When household expenses are rising faster than a witch’s broomstick, it’s tempting to take a little money here and there from your emergency fund. This is especially true in the autumn, when people tend to spend more than usual due to back-to-school costs and other fall expenses. But beware! Draining an emergency fund may put you in a tight situation if the worst should happen, such as a car breakdown, job loss or unexpected home repair. Instead of reaching for the emergency fund, aim to lower monthly bills by adjusting your budget and avoiding lifestyle creep. 

Overspending on Credit Cards  

Credit cards can be a blessing or a curse, depending on how you use them. On the bright side, the right credit card may offer fraud protection, convenience and cash-back rewards; but on the dark side, credit cards can encourage overspending and lead to high-interest debt. To avoid the spell of credit card misuse, study up on best practices so you know how to use cards smartly: including common myths, interest rates, and responsible card use. And, if like many people you’re already haunted by credit card misuse, speak with a debt counselor as soon as possible. 

Failing to Forecast Upcoming Expenses  

Building a budget isn’t so different from looking into a crystal ball—it’s all about trying to predict the future. If you’re not forecasting upcoming expenses, then you might be living with a household budget that doesn’t actually meet your needs. Do you find yourself having less money at the end of the month than expected? Or relying on high-interest credit or even payday loans to afford the essentials? All these circumstances could call for a more robust budgeting practice. Check out budgeting tips at the Harvard FCU blog if you need help getting started!  

Letting Retirement Benefits Go to Waste  

Some workplaces offer 401(k) matching benefits, meaning an employer will match a portion of your contributions to the employer-sponsored retirement savings plan. For example, a workplace might match fifty percent of the money you put into the 401(k)—so if you contribute $10,000, you could be getting an extra $5,000 per year. However, many employees aren’t aware of what matching benefits are available or don’t take advantage of them. Getting the most from matching benefits requires the employee to set aside more money for retirement, which means less saving or spending in the short-term. Always examine the impact on your household budget, but beware letting these benefits go to waste.