Being a homeowner can be a huge financial investment. After all, beyond the mortgage payments, you also have repairs, home improvements, and a ton of other costs that renters generally don’t have. That’s why it’s crucial that you have your finances straightened out, and make sure you don’t buy a home that’s beyond your budget. To help with that, here are 7 deadly financial sins from savvysugar.com that homeowners should avoid.
1. Not opening your statements. Sure we should be green and opt for paperless statements, but it’s crucial that you still have a complete understanding of where your finances are at. Avoiding or ignoring statements can cause you to overdraft, or exceed budgets, neither of which is good for maintaining a healthy savings.
2. Not saving for retirement. There are always more pressing expenses that make saving for retirement less of a priority, however saving early will mean the money has a longer period of time to compound, thus getting you greater returns.
3. Not having an emergency fund. Your emergency fund should be at least 6 months of living expenses. Wow, that’s a lot! Many people are either in debt, or only have a couple thousand saved up, but an emergency fund is for disasters like losing a job, so that you have adequate time to get back on your feet without running out of money. So be sure to start saving a hefty amount beginning today.
4. Paying the minimum on your credit card. Credit cards are unsecured debt, and thus have a much higher interest rate than say your mortgage or car loan. By paying the minimum amount, you are paying mostly interest that will never lower your debt amount by a significant amount.
5. Not actively managing your finances. Investments, loans, and budgets should never be a “set it and forget it” thing. Instead, all your retirement funds, savings accounts, and money matters should be reviewed often, and adjusted when necessary.
6. Living beyond your means. This is a great one, and one I’m most often guilty of. It’s so tempting to buy that extra thing, or want more ”things”, but this is detrimental to any person and really at any income level because you can never make “enough” to support the habit. So the next time you see something you want, remember to check your budget, and stick to it.
7. Forgetting to enjoy life. It’s easy to get caught up on finances, and forget the old cliches that “money isn’t everything” and that “the best things in life are free.” So while you should have all the points above taken care of, the occassional splurge and enjoyments are necessary for a happy life.