22 March, 2019 steades

5 mistakes you should not make with your money in this new year

(CNNMoney) – Fulfilling New Year’s resolutions can be a big challenge, because of all the effort they demand. But, here we bring you a much easier approach to follow.

LOOK: Six financial mistakes that could ruin your personal finances
You just have to stop committing these five financial mistakes. The result? You will achieve greater savings, smarter spending habits and a secure identity during the next year. Prepared?

1. Stop saving what’s left over

Saving should not be a last minute idea. In fact, you should adopt the “pay yourself first” model, which is a proven form of battle to increase your savings.

Do not wait until the end of the month to find out exactly what you have left and add it to your savings. This strategy tends to be, at best, insignificant and arbitrary and, at worst, just a sense of guilt because you are in zeros. Instead, set up an automatic transfer that, every time you enter the payment to your account, will move the same amount of money to your savings.

How much should you set aside for this purpose? In case you do not know: the ideal is that you save between 10% and 20% of your annual net salary. However, your first task is to have at least $ 1,000 in a savings account for your emergency fund.

Action plan: decide the amount you are going to reserve at home, payment period. Then, go to your bank’s website and set up the automatic transfer to run on the day your salary arrives.

2. Forget about easy payments (and painless)

Every day, warehouses and payment systems are restructuring processes so you can pay more quickly and easily.

But the more you get away from the act of paying (which is painful), the more likely you are to spend a larger amount of money, according to Dan Ariely, behavioral economist and co-author of the book Dollars and Sense.

“If it’s an automatic deduction, you do not experience the nuisance in the same way and are less aware of the expenses,” he explained.

Action plan: Pay in cash or by check, when possible. Do not keep your credit card number on the computer, on the websites of the stores or in virtual wallets. Avoid payment systems with just one click.

3. Stop being silent about money

Research shows that we are not only bad at handling money, but we also fail to talk about it.

Even so, there is good news: the studies also reveal that the more we talk about it, the more confidence we have and the more information available to make better financial decisions.

In addition, young people are better at sharing and comparing their financial victories and failures than other groups.

The fact of talking with other people about money, makes us more aware of the invisible savings that some are making compared to their more visible expenses. It also helps us make more informed and less stressful financial decisions, when we take the time to ask our friends about their strategies with money.

Action plan: Discuss your retirement savings with your closest circle. Then, ask your best friends about their salary. They could also share and compare applications.

4. Say goodbye to your wholesale purchases

The purchases in wholesale stores make you spend and eat more, as revealed by a recent investigation.

People who shop in stores like Costco, BJ’s or Sam’s Club spend more on packaged food, shop more and consume more calories from packaged foods, than if they did not make their comparisons in a store of this type.

The researchers found that, in addition to not saving, you increase your packaged food expenses by $ 3.50 per person each month.

 

Action plan: make your purchases weekly in the supermarket and thus avoid spending more. If you already have a membership in these wholesale places, write a list and follow it to the letter.

5. Do not allow your credit to be available to anyone

The news about the hacking of information from Equifax – in which the personal and financial data of 145 million people was accessed – has disappeared from your social networks and from the owners, but the risk of identity theft still remains.

If you did not check to see if you were one of the people affected last September, when the hack was announced, you should do so immediately.

Regardless of whether your information was uncovered or not, you should place a credit freeze on your three credit reports. This strategy allows you to continue using your existing credit and your current creditors can access the files, but nobody else can see your report and – most importantly – can not establish new lines of credit.

Unfortunately, creed freezes are not free for everyone, but the small fee you’ll have to pay will be tiny compared to the money you can lose and the headaches you would suffer if your identity were stolen.

Action plan: to establish a credit freeze, go to the freezing page on the website of each individual credit company: Equifax, TransUnion, Experian.

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