It can take a lifetime to learn the ins an outs of successfully managing money. With all of the potential for financial mishaps and expensive errors, managing one’s finances can be a stressful and complicated process.

Getting Smart About Your Spending

Making the smartest choices when it comes to money is too often about trial and error. While you can learn the hard way, it’s often easier to look out for money mistakes before they happen. Read on to learn 11 of the most common mistakes that most people make.

1. Only Budgeting for Right Now

Budgeting for the short term without considering what you may need in the long-term is a definite way to lead to financial trouble. Instead of making only a monthly or weekly budget, it is best to look at your finances from an annual standpoint. Looking at your finances while considering the rest of the year will help you provide the most cushioning in case of emergency.

2. Spending too Much on Housing

You won’t get far in life if you spend everything you earn. It’s important to be able to save a large amount of your income, specifically saving a dollar for every three dollars that you make. Many people with tight budgets are okay financially until they find themselves overspending on housing.

Typically, renters are encouraged to spend one-third of their earnings on housing. When it comes to the average renter, however, spending a third of the income is far too much. Most people have additional monthly expenses like student loan debts, child care fees, and similar expenses that make it difficult for them to meet their needs.

3. Not Spending on Career Investments

While you may initially think that spending money to invest in your career is a waste of time, putting money into professional development can allow you to advance in your career. By spending on a career coach or a training course, you can build the credentials that will help you earn your next promotion.

As you consider the various options for career investments, always shop around. While formal coaching is likely to cost upwards of $200, you can probably get similar advice and mentor from a close friend or experienced colleague over a coffee or lunch.

4. Overusing Credit Cards

While earning rewards with credit cards is a tempting idea, having a credit card handy typically leads to you overspending when you otherwise wouldn’t. In order for you to earn rewards, you are encouraged to spend a certain amount. Instead of focusing on your budget and only buying what you need, credit cards offer you a quick and easy way to charge it all now and earn rewards, all with the stark realization that you’ll have to pay it off later.

5. Not Negotiating Prices

Many people don’t realize they could be saving more money by negotiating on almost every price. Most big box and department stores will match competitors’ prices. In order to make the most of this price matching, do your online research before you visit a store to know what retailers are offering for the same products. By knowing the price of these products in other stores, you’ll be able to score a better deal every time.

6. Having Only One Source of Income

Relying on only one source of income is financially risky. With all of the uncertainty in life, it is unwise to depend solely on one job to provide for you. In this day and age, it is best to pull income from multiple sources instead of just your day job. Consider signing up for freelance work, opening an online store, or holding coaching or consultation sessions in your niche.

7. Having too Much Debt

While not all debt is bad, taking on too much debt can send your credit score down. Oftentimes when consumers open multiple lines of credit, they may struggle to pay their cards off. Repeated failures to pay off credit card debt can send your credit score spiraling down.

Similarly, people that are too afraid of debt avoid taking on any altogether. Without any credit, you may have difficulty applying for loans, renting apartments, or making certain purchases.

8. Spending too Much on Gifts

Buying gifts for holidays and birthdays can get quite costly. Many people mean well when buying presents but often go overboard by overspending on gifts they aren’t sure the recipient even needs or wants. Instead of wasting your hard-earned money, consider cheaper choices for presents. Baked goods and quality time are excellent alternatives to pricey impersonal gifts.

Learning how to properly manage your finances is all about being intentional. Use these eight strategies to help you get a handle on your money. With the right guidance, you’ll be putting your money to work for you, instead of the other way around.

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