Do you know what is the biggest problem of Americans? They don't know how to manage money in the first place. This is not the end.
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Michelle Blackmore On 4th Apr,16
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Are you making the same mistakes?

Do you know what is the biggest problem of Americans? They don't know how to manage money in the first place. Most workers don't create an emergency fund, and 42% of them are unable to manage debts on their own. This is not the end. Studies reveal that 1/3 of workers can't even control their expenses every month. Needless to say, they end up spending more every month.

Every day, people belonging to all income levels make some big money mistakes. Unfortunately, they're not even aware of it. As such, they end up doing the same mistakes and are unable to manage finances on a daily basis.

If you take a close look into your finances, then you'll notice that you too make a lot of money management mistakes every year. Here are the 5 most common mistakes you're making unconsciously. Try to correct these mistakes as soon as possible if you really love your financial life.

Mistake no 1: You don't think about your non-monthly expenditures

There's hardly anyone who thinks about credit card debts and expenses during holidays. This explains why a lot of people incur debt during holidays. The biggest problem is most people don't think about these expenses throughout the year. As a result, they tend to depend more on credit cards and pay heavy interest rates later on.

Tip to avoid this mistake: You can avoid this mistake by dividing the amount (that you're going to spend during holidays in a year) by 12. This means if your budget for holiday expenses is $2400, then try to set aside $200 every month. At the end of the year, you can use the saved amount for Christmas and New Year celebrations.

Mistake no 2: You've a vague idea about your expenditures

What will you say if someone asks you about your expenditures? Will you be able to say the exact figure you spend every month? Or, will you give him a list of a few bills you pay every month? If you'll go for the second option, then you're in trouble. You don't even know how much you spend every month. How can you even think of managing money properly?

Tip to avoid this mistake: Have a look at the last 3 months' bill statements. Record your monthly expenses in your smartphone or an Excel spreadsheet. This will give you an idea about your monthly expenses. You can now plan your future expenditures accordingly. Another way to track your expenses is to download the budgeting applications that are available on your smartphone. This will help you stay updated every minute.

Mistake 3: You're a gadget freak and love to be the first one to own gadgets

You love gadgets. You love to explore technological innovations and don't mind to pay a heavy price for latest gadgets. It's your passion. You can wait in a line for a long time and pay a heavy premium to buy the latest gadget in town. It gives you a thrill to be the first person to own the latest model of iPhone. It's another story that you spend a huge percent of your income for it.

Tip to avoid this mistake: Have patience and wait for a few months. It's not always nice to compete in the rat race and be the first person to own a gadget. Buy the debugged version of the gadget for less after a few months. It would be a good deal for you.

Mistake no 4: You prefer to save on the last day of the month

If you love to save whatever is left on the last day of the month, then you're doing a big money management mistake. Don't be shocked if there isn't a penny left on the last day of the month. After all, you've spent all your money throughout the month. You don't have any money for emergencies.

Tip to avoid this mistake: Transfer your money from your checking account to a savings account every month. Set up an arrangement with the bank so that your money gets automatically transferred after you get your paycheck. You can also get your paycheck deducted every month for medical care and retirement plans.

Mistake no 5: Paying a good amount for the best-selling books

Spending $30 for a best-selling book that isn't as good as your buddy said is again a money management mistake. If you don't even feel like finishing the book, then what's the point in spending so much money for it? Besides, even if the book is really good, will you read it again and again and again?

Tip to avoid this mistake: You can get a copy of a national best-seller in your local library only. You don't even have to go to several stores. Besides, you can download e-books for free.

Conclusion

Money management mistakes can ruin your financial life. Avoid making the aforementioned mistakes and embrace frugality to overcome financial crisis. Stay updated about the recent happenings in the financial world so that you can take every step carefully.

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