Edward Jones Diversity Series

This Edition: "Money Mistakes You Should Avoid"

by Edward Jones, IMDiversity Featured Employer

In the quest to manage your finances, keep an eye out for the following common money mistakes that can foil even the brightest saver. They may help you avoid stumbling blocks on your pathway to financial success.

Common Mistakes to Avoid

Concentrating more on dollars than cents

In the search for bargains and savings, strike a balance between the value of the savings and the energy necessary to get the savings.  Are you spending more in gas driving around to find the deal of a lifetime on laundry detergent?  Clip coupons, but be sensible about the effort you put forth to pocket change.

Failure to create a budget

Budgeting can be a tedious task, so many people choose not to create one.  If this has you feeling guilt-ridden, try focusing on the expenses you believe could benefit most from your frugal eye.  Look at your top categories of expenditures, and find ways to trim them.   Do you really need a new winter coat and accessories or one more dinner out this week?   Put the money you would have spent into your savings account.

Haphazard spending

Doling out a few dollars here and there on frivolous purchases every day can really add up.  Instead of picking up a cappuccino on the way into work or munching on a candy bar from the gas station, ask yourself if money could be better spent on your next vacation to Europe or the high definition television you have your eye on.  Keep track of these expenditures and you will probably see a clear picture emerge with regard to your biggest spending culprits.  Once you have identified where your money is being siphoned, take charge and adjust your spending.

Failure to recognize credit report discrepancies

Credit reports are a major part of everyday life.  These chronicles of your credit history are used by anyone interested in extending you credit, potential employers interested in hiring you or property owners interested in renting to you.  Creditworthiness is important, and any blemishes on your report can affect more than what kind of car you purchase.  Review your credit report regularly. 

You may qualify for one free copy of your report under the 2003 Fair and Accurate Credit Transaction Act.  Call the three major reporting agencies — TransUnion (800-888-4213), Equifax (800-685-1111) and Experian (888-397-3742) — to request copies.  Each agency’s report could differ slightly, but each will have information on how to read the report and how to dispute discrepancies.  Even if you have to purchase a copy of your report, the nominal fee will be money well spent in the long run.

Not taking an active role in household finances

Allowing your partner to control the household finances can be a time-saver in the short term, but the long-term consequences could be devastating.   An accurate accounting of how much money is spent on expenses, knowing where key financial documents are filed and having a general sense of how much money is on hand are extremely important should you suddenly become the financial caretaker at home.

Sit down with your partner, become better acquainted with your household finances, and take on some of the maintenance yourself.  Even if you do not have domain over a particular budget item such as investments, take the time to understand what is happening, and get comfortable with this role.

Money mistakes can happen to the best of us.  Arm yourself with knowledge about your credit, household finances, spending habits and budgeting requirements to make the most of each paycheck.  The possibilities are endless as to what you can use extra money to achieve.  Think about working toward setting yourself financially free by investing extra dollars with an investment professional such as the ones at Edward Jones.  Edward Jones is online at www.edwardjones.com and around the corner in your neighborhood.

View articles from previous editions in the complete Edward Jones Diversity Series Archives

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