When it comes to finances, there are some common faux pas you should avoid. Ensure that you’re making good monetary choices by steering clear of the following.
Downplaying the Cost
Dishonesty is a major financial faux pas. It’s easy to stretch the truth a little when it comes to spending and costs. However, honesty and transparency are the best financial policy. Be honest with not only yourself, but your partner as well. An article written for forbes.com states, “Sometimes when you’ve spent a little more than you meant to (or probably should have), it can be tempting to stretch the truth about your shopping trip, whether to your parents, a roommate or your spouse. A 2005 survey by Money magazine found that 71% of those polled kept money secrets from their spouses. So, while this financial faux pas may be very common, it’s one social norm you must avoid.”
Nothing throws off a budget like a good old fashioned impulse purchase. Sometimes things pop up and we feel like we have to get them immediately. It could be a concert ticket, new purse, flight to Vegas, or any other unexpected want. Just to be clear, these are all items you can absolutely spend money on. If you have designated money set aside in your budget for fun or extra expenses, that’s awesome! However, if you have failed to save money for these types of purchases, you shouldn’t go into debt to acquire them. Impulse purchasing can be avoided with careful saving and self- control.
Borrowing in Excess
Credit cards make it easy to spend money and forget about it. Furthermore, it can be a slippery slope from acquiring one card to owning 3. Borrowing money in excess is a serious financial faux pas. Multiple credit cards aren’t ideal particularly when you’re trying to get your financial ducks in a row. A solid strategy for managing your debt would be to keep one card for emergencies only. If you plan to use this card to purchase anything, make sure you have the money in your account to pay it off right away. This strategy will help you stay financially responsible while also providing you with an emergency plan should you need one.
Failing to Invest
If you’re one of those people who aren’t investing and aren’t contributing to a retirement fund, you’re committing a major financial faux pas. Investing money in the stock market is a great strategy for growing your personal wealth. It’s a long game which means your money will increase and decrease a million times over the course of a few decades. Don’t panic, keep your money invested and watch the numbers grow over time. Additionally, if you’re not contributing money to a retirement plan or 401k, start immediately. Give your money time to grow by starting your investment journey today.
Making smart financial decisions is easy when you avoid the above mentioned faux pas.