8 Foolish Financial Moves to Avoid

8 Foolish Financial Moves to Avoid
A fool and his money are soon parted. However, there are many people who are smart with their money that still make foolish mistakes every now and then. That’s easy to do because, these days, there doesn’t seem to be much of an emphasis on financial education.

Here are 8 foolish financial moves to avoid.

1. Getting a Big Tax Refund

If you’re tempted to pat yourself on the back because you’re expecting a big tax refund this April, resist the urge to do that and consider flogging yourself with a wet noodle instead.

Why? Because you just loaned the government money interest free.

Think about it. Why are you letting Uncle Sam take more money out of your paycheck than is necessary? You could use that money yourself for investment purposes.

Talk to your employer about increasing your withholding allowances so you can keep more of your money.

2. Paying Someone to Do What You are Capable Of

If you’re savvy with tools and carpentry, put some sweat equity into your own house instead of paying somebody else to fix it up for you. You’ll save a lot of money and you’ll also ensure that the work gets done right because you’ll be doing it yourself.

3. Failure to Negotiate

Negotiate everything you possibly can. Negotiate when you buy a car. Negotiate when you buy furniture. Negotiate at garage sales.

Think about it this way: the worst that’s going to happen if you attempt to negotiate is the other person will say “no.” In that case, you’re no worse off than if you didn’t try to negotiate at all.

4. Failure to Budget

Be sure to budget your annual income and your annual expenses. Then, have the self-discipline to follow the budget that you’ve developed.

You’ll often find that when you follow a disciplined approach to budgeting your money, you’ll have quite a bit left over at the end of the month.

5. Ignoring Your Credit

There are many advantages of good credit. However, you won’t know if those advantages are available to you if you don’t know anything about your own credit history.

Get yourself a free credit report and go over it. If there are any mistakes on it, contact the appropriate parties and get them resolved.

6. Buying Name Brands

Okay, we’ll confess that there aren’t too many ketchup companies as good as Heinz. Beyond that, though, you don’t really need to buy name brands. Look for generic alternatives when you’re shopping.

7. Saving While in Debt

It might be tempting to build up that nest egg while you’re drowning in an ocean of debt, but you’re spending money on interest expenses for every credit card that isn’t paid off at the end of the month. Use that excess cash to get out of debt and then build your savings account.

8. Buying a New Car

A new car depreciates so quickly that it becomes a used car approximately 45 seconds after you buy it. Save yourself a fortune by buying only used cars.

People who simply don’t know the best way to manage cash are most prone to money mistakes. Avoid making foolish financial moves that will cost you a lot in the long run.

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