January 20, 2022
5 Money Mistakes to Avoid
Among the pandemic, a volatile economy, and an unpredictable jobs market, people may be tending to have more of a short-term outlook on their money. And that can lead to problems down the road when it comes to your long-term financial security.
Centers Healthcare is sharing five money mistakes that you’ll want to stay clear of, regardless of the temptation.
- Traveling Across Town to Save on Gas
While you may feel good about heading to that one station where the gas might be five or 10 cents cheaper than the station by your house, consider how much time and gas you’re using to get there. If you have an 18-gallon tank, a 10-cent difference in price amounts to $1.80 to fill the tank from empty. With prices the way they are, if you’re using a half-gallon to get that cheaper gas, you’re better off just filling up by the house.
- Failing to Check Accounts on Auto Pay
Auto pay is great to avoid late fees, but you still need to check your accounts—especially credit cards. Always make sure you’re not being charged for something extra, and in the case of credit cards, be on the lookout for fraudulent charges.
- Co-signing for a Relative’s Loan
It might seem harmless to co-sign for a car loan or an apartment lease for a relative, but that loan appears on your credit report, and if things go sideways, you will be the one who’s on the hook and pays the price.
- Taking Money Out of Retirement Accounts Early
Yes, it’s tempting to take out money you have access to, but you’ll pay for it in three ways. First, you will have to pay a 10% penalty if you’re under 59.5 years of age for an early withdrawal. Second, you will have a hefty tax bill, and third, that money will no longer be available to you and growing in your account for retirement.
- Putting Off Your Final Wishes
Failing to create an estate plan will cause an emotional and financial burden for your loved ones after you’re gone, especially if something unexpected happens. A will allows you to have the final say in what happens to your possessions after you die, and having a power of attorney helps family members get on the same page to avoid confusion in case something does happen to you.