10 Financial Mistakes To Avoid This Holiday Season

 

The holiday season is around the bend and you adore it or hate it, it’s coming. Numerous people fear the financial misfortunes it forces on them every year. The following are 10 financial mistakes to maintain a strategic distance from, this holiday season by the holiday trip planner! These tips offer you some help to enjoy your holidays without having a pinch in your pocket.

This is a great time to shop and we can hardly resist those grand sales plunging up on every corner! We want to celebrate our Christmases BIG! And however hard we try, the festival shopping, gifts for family and friends and the Christmas vacation has a huge setback on our budget!

With these financial errors to avoid from this Christmas season, you will have the ability to reduce your financial stress for this season, as well as for future ones too.

1) Not having a financial plan.

If you never utilized a financial plan for your own accounts, then risks are that you are going to fail miserably this season!

What amount would you say you are going to spend? What amount of cash would you say you are going to need? In particular, what are you going to afford? Shopping without a financial plan this Christmas is one of the top mistakes consumers do. Implementing a financial plan is the first thing everybody ought to do when planning on going to shop this Christmas season.

2) No budget Christmas by any means.

If you do budget each month then you most likely are liable of this; not planning for Christmas. We are not perfect, and truly, this is a slip-up that many people do almost every year.

Do not plan for Christmas. Knowing the fact Christmas is coming. You will realize that it will drain you financially, still never do that. The reason behind this is because you will do the following things given below:

Not pay a bill or bills on December to buy Christmas presents.

Shop for Christmas and use a credit card.

It requires some time to understand that if you can budget Christmas in January, You will have the ability to stay away from these mix-ups and have an obligation and stress free Christmas.

3) Not having a plan.

If you don’t take a seat and plan your holidays, you are going to overspend your hard earned cash. Planning your spending, your shopping, even your entire holiday if vital, will offer you some help with saving cash and keep yourself on track this Holiday season.

4) Do not have unreal expectations.

Let’s face this, we do have unrealistic expectations of Christmas; and this transpires each Christmas season. We see the ads, we watch films, we see these expectations of what Christmas “ought to” be or feel like. This is the point at which you have to keep it genuine.

No, you are not going to get a brand new car with a red bow on the top. No, you are not getting a dream vacation package for Christmas. Be reasonable with presents and your expectations, Christmas is not just about presents.

5) Shopping out of guilt will destroy your finances.

Feeling guilty because you couldn’t afford to buy everything your family needed may prompt overspending. Try not to promise your children or family what you can’t afford. You don’t need to buy for somebody because they gave you a gift. If they get mad because you didn’t give back a gift, possibly you have to question your relationship.

Once more, you don’t need to buy presents for everybody if you can’t manage the cost of it. You shouldn’t be made to feel guilty that you didn’t give somebody a gift back because they gave you a gift. If you are willing to shop, then the best way is to rest over it. YES, go to bed.

6) Not checking your Christmas list twice.

Again, if you can’t afford to purchase for everybody on your list, trim it. If you can’t afford to purchase every one of the things on your list, trim it. If you were in a rush when writing this list, chances are you committed a couple of errors on your list. Double check that list of yours to keep you from overspending.

7) Not being sorted out.

If you shop, spend, and don’t keep track of your spending, you will be stuck in an unfortunate situation. Keep your receipts and place them in an envelope while you shop. You may require those receipts for refunds and such. Not being organized will affect your accounts.

8) Not taking advantage of rewards and discounts.

Numerous stores offer rewards either in a type of club cards or store cards. You can score discounts and also refunds/money saving apps that give you refunds when you buy chosen things. Always verify whether you can save cash with phone apps or store discounts.

9) Opening store MasterCard for rebates.

One of the principles about credit cards should be like this: if you have a money related chaos, put them away! Try not to utilize them. If you have credit card obligation and don’t have the control to utilize them and pay them off immediately, then you should not utilize them.

Be that as it may, if you don’t have the assets to pay this completely towards the end of the month, you are going to wind up paying way more than what you saved.

The fact of the matter is this, don’t fall into this trap. If you don’t have the money to pay all required funds, then don’t try opening a Visa only for the rebate. You will wind up paying more than the 20% you saved over the long haul.

10) Sit tight for the last minute.

There are a lot of people that basically hesitate and hold up until the last moment to go shopping during the Christmas season. When you do this, you are spending abundant excess money on things that were on sale.

Without a doubt, you get the chance to see more sales relying upon how sales are getting along during the Christmas season, yet you are not getting absolute bottom costs. You will discover sales on things the stores need to dispose of. You are likewise absent on free shipping. If you are leaving things for last, chances are you didn’t plan your trip and will overspend your money.

Three Steps To A Financially Secure 2016

A great way to begin the new year is by reviewing your personal financial plan. It’s a good feeling to begin another year with financial goals ready to push forward.

Using currently known variables, you can predict future cash needs for major life transitions, such as retirement. I’ve identified three quick steps to easily complete before 2016 begins.

Portfolio Checkup

Revisit your risk profile to consider how much or how little risk you’re ready to take with your money. All investments involve risk, but how you divide your investment money among asset types (stocks, bonds, short-term reserves) is important for developing your best “sleep well at night” risk level.

Matching three risk factors with your personality will help you invest long-term with best results. Commonly used risk profile surveys are found with a Google search, or your own brokerage version will help gauge your risk level.

Time horizon: This is the length of time you have in years to meet financial goals and make up losses that occur. Longer horizons allow for higher risk and time to regain losses. How long can you steadily invest before you’ll need to take income?

Cash requirements: If cash is needed to meet day-to-day expenses, you have the shortest of time horizon, and assets used will be low-risk but lower-return. Short of a major calamity, can you invest without pulling money for current expenses for more than five years?

Emotional Factors: Your emotional tolerance to risk will decide the makeup of your portfolio. As a subjective element, this factor is not difficult to calculate. We all know how we react to market ups and downs. Reflecting this in your portfolio allocation is vital to successful wealth building.

Based upon your risk profile check-up, you may need to rebalance your investments:

  • sell assets no longer fitting your profile and investment goals
  • add assets that better match investment needs and goals
  • simply enjoy the fact that your current portfolio still matches your risk profile

Cash Needs Analysis

Estimating how much cash you’ll need for a large personal loss and determining cash availability falls pretty much within the insured loss area, such as car, home, business, and life. The reason we carry insurance is for unanticipated life events that take a lot of cash, and it keeps us from tapping long-term investments.

Examine current coverage levels for this step. Keep your cash needs chart short and not too detailed. Check three primary areas for cash needs and cash available.

Review personal liability insurances

  • Auto, homeowners, small business, umbrella liability, et cetera.
  • Have your needs changed enough to increase, decrease or drop coverage?
  • Are insurance deductibles acceptable?
  • Can you meet a deductible with cash or would you have to use a credit card?

Review life insurance

  • Whether term or permanent life, the purpose is to supply immediate cash when death occurs.
  • Life insurance death benefits are income replacement, even if covering a stay-at-home spouse or partner. A non-working spouse or partner brings tremendous value into a home that is hard to monetize.
  • For example, a person earning $100,000 annually will add a million dollars to the home over 10 years, not considering increases in wages.
  • Coverage amount requirements are usually greater than we think.

Cash-Available-for-Use

  • Don’t forget to make allowances for current expenditures that will no longer be continued.
  • Examples could be: one less car payment, lower budget allowance in food, clothing, personal expenses, et cetera.
  • Consider cash received from Social Security, 401K, separate savings accounts, and other sources.
  • The goal is to realize that major losses impact families beyond personal finances. A major loss changes family dynamics, and the immediate need will be having the time necessary for family decision-making, readjustment and future direction.

Debt

Debt always looms in our culture, and it’s another reason we can’t seem to keep long-term financial goals on track. Begin each new year assessing your debt burden.

Debt is a double whammy of interest cost stacked on more interest cost.

  • The first interest cost begin when you buy using debt.
  • The second interest cost is the interest you’ll pay for incurring debt.
  • If debt in your life is revolving credit (charge cards), you’re often dealing with never-ending payoff if not managed properly.
  • Interest paid on debt compounds faster than income received compounds in an investment portfolio.

Finally, you can complete this check-up in about three hours. Each step is an important part to make sure future cash needs are met. Consult personal financial professionals, and keep your future on course for success. It’ll be a great start to 2016 and give you a sleep well at night financial plan.

Top Ten Financial Mistakes Young People Make

Most young people dream of becoming financially independent and even rich by the time they are past middle age. However, most of the time, this depends on a host of factors, the most important of which is how financially responsible they are. The issue of financial responsibility is unfortunately very difficult for many young people to grasp, and this in turn means that they may not have a chance to put their financial life in order when they are young. There are a few mistakes that most of them make, and which often have a negative impact on their finances. Some of these include:

Not making full use of discounts

These days it’s very easy for one to use discounts to buy various goods and services. For instance, you could go online to get coupons and then use them to buy whatever you need at a much lower price. However, the problem is that most young people don’t think much of such discounts. The fact that the nominal value of each normally seems very small usually makes such individuals think that they won’t save much anyway if they used the discounts. However, this is essentially faulty reasoning, since regular use of such discounts has beneficial effects on long-term finances.

Improper use of credit cards

Most youngsters also have a difficult time using credit cards and other forms of credit. For instance, they might fall into habits of not paying off the bills on time, which could end up ruining their credit scores. This is not a good thing when you consider the fact that they do this from an early age, which means that when they reach middle age they usually have very bad credit scores. This in turn means that it would be difficult for them to get loans or other forms of credit at friendly rates.

Not getting a hang of budgeting

When you need to take control of your finances, one of the most basic yet important skills you can have is how to budget. However, most young people don’t do this right, and this means that they end up having a hard time later on. With the advent of Internet Technology and the use of apps, budgeting should be very easy to do today compared to the past. The fact that economic times are harder today compared to in the past also means that most young people have more to lose by not budgeting properly, so this is something they need to keep in mind.

Not assessing limits when getting credit

In life, it’s usually necessary to get a loan or mortgage to buy something of very high value such as a house or a car. In fact, it’s better to do this when you are young, since it means that you will have enough time to pay off the debt before you get too old to enjoy your investment. However, one problem that most young people make is not applying for such things in the right manner. For instance, they might not adequately figure out how much of a debt they can handle, and then end up chewing off more than they can swallow. This often leads to problems such as difficulty in paying back the debts.

Not keeping in mind the fact that little things do matter

Some habits count as little things, and these tend to add up over time. For instance, there are some people who make a habit of drinking coffee regularly, even if it’s evident that they would still be able to function without it. Most of the time, this is done with the idea that this habit is not very expensive. However, the costs of these little habits can add up, and with time you may end up spending a huge chunk of your income on them. It’s therefore best to take even the smallest of expenditures wisely, especially if they are regular.

Not having an emergency fund

Whenever problems that need urgent attention crop up, most people who don’t have emergency funds to handle them end up having a difficult time handling them. In some cases, they might have to borrow money at exorbitant rates in order to deal with them. Making sure that one has an emergency fund for such occurrences is wise, and ultimately cheap as well.

Using automatic payment systems

Using automatic payments seems like a good idea. The fact that they get deducted from your account automatically means that you need not focus on some of these recurring bills, which is a good thing for a busy young individual. However, some of these payment services cost money, and there are times when you may end up over drawing your account as such costs eat into your deposits. If you want to take control of your finances, it would be easier to set reminders to pay such bills manually.

Getting joint accounts

Most young people open joint accounts with their partners on a whim. However, this might turn out to be a source of trouble, since you may end up having trust issues and even having disagreements over how money is used. Before doing this, it’s wise to first iron out the fine details such as how you are going to operate the account, and who will be responsible for what expenditures.

Not understanding ATM fees

Most people draw money from ATM’s, and this might turn out to be a drain on resources if one does not understand how they work. It’s important for young people to minimize how much they spend on ATM fees, such as by always withdrawing from ATM’s of their banks, and also making sure that they minimize the number of withdrawals they make.

Having no long-term plans

In order to secure themselves, people need to have long-term plans, and also make a point of making such plans work. This is something that most young people don’t think of, mostly because they don’t find it necessary given how much time they have. However, this is an attitude that should not be used. Having long-term plans increases the chances of one being at a better place by the time they are at a more advanced age, at least in terms of finances.