10 Common Money Mistakes

money mistakes

As a DailyWorth editor, I’m often asked for financial advice. By everyone. When people know what I do for a living, they instantly want to show me their student loan statements. They want my opinion on their 401(k) contributions. They ask what credit cards I swear by.

I’m not a financial advisor, nor am I doing any credit card plugging. But I often encounter at least one, if not more, of the following financial pitfalls perpetuated by my professional sisterhood. Here are the 10 most common money mistakes I've seen.

1. You aren’t automating deposits to savings.
Even if you’re a diligent, Type-A person who sets aside time every month to manually transfer money to your savings account, it’s dumb that you’re not automating. Why? Because automatic deposits ensure you save (and save time). The good and bad thing about money is that it has the capacity to add up very quickly. So even transferring two digits every two weeks could translate into a secret emergency fund in eight months. You never know.

2. You aren’t reading your retirement savings account statements.
Sure, you signed up for a retirement account like your financially responsible friend/DailyWorth told you to — but who knows where that money goes or how much is there? Reading your statements is important because it gives you a better understanding of what’s actually happening with your money so you know how you earn returns and whether the package you chose is working for you. Maybe you have a bigger risk tolerance and want to sink more money into stocks. Maybe you are that mythical risk-averse female and want more mutual funds. But if you never look at what your account is doing, you’ll never know.

3. You don’t have your name on your lease or mortgage.
If you’re moving in with a partner, you always need to follow the golden rule: Make sure your name is on shit. That way, if the relationship goes south or if they take up with a 20-year-old, you can say, “Well, this is my house too, so you get out” — and the law will actually back you up.

4. You don’t have credit cards with cash back/travel points/rewards.
This is 2015. At this point, I expect every credit card offered to me to come with checks in the mail, discounted flights to Hawaii, and nothing short of doing my dishes. And so should you. There are too many ways to use credit cards to your advantage to have even one card that doesn’t do perks.

5. You aren’t paying off your credit cards every month.
Don’t carry balances (unless it’s an emergency or very special circumstances). Credit card interest is stupid and there’s no legit reason you should pay interest on Starbucks. Use credit cards like debit cards and pay them off — in full — every month. Your credit score will thank you.

6. You aren’t regularly checking your credit score.
Do it. Every year. While it’s good to know it for things like buying a home or leasing a car, credit reports also allow you to catch weird stuff, like somebody opening a line of credit in your name or rogue medical bills you forgot about and never paid off. Know what is happening with your credit and your good name.

7. Your dad is still doing your taxes.
Or your mom. Or your grandmother who doubles as the family accountant. Be a grown-ass woman and go to H&R Block or hire an accountant or learn how to do them yourself. Financial independence means understanding why the government is taking your money and figuring out how to keep more of it.

8. You don’t talk money with your spouse/long-term partner.
Are they big savers like you? Do they have massive debts? And if so, how massive? There’s a reason discord about money is a big predictor of divorce — financial compatibility is key for relationship longevity. And it’s not exactly going to work out if you hoard money and your partner has a compulsive shopping problem. Find out now so you can have a better idea what you’re signing up for.

9. You are paying the minimum on your debts — even though you can afford more.
Minimums should be renamed “the amount you pay to keep yourself enslaved.” Cut out dumb stuff like cable and pay your balances. Eat beans. Don’t buy clothes for a year. Try getting more stuff for free. Give everything to the credit card company before they take everything from you.

10. You are waiting to buy life insurance until you’re really old.
Ladies, you can lock in a fairly cheap life insurance policy in your 30s while you’re still spry and in good health. These policies (which you will likely need if you have a partner or babies) will skyrocket if you wait until you’re up there with the Golden Girls. Save money. Buy now.

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