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How the average person can save money quickly and easily

The Biggest Five Financial Mistakes

fm-1Everyone makes mistakes. Remember the perm that your girlfriend talked you into the day before your driver’s license picture was taken? Who knew that driver’s licenses are good for five years in most states? GettingMoneySmart.com doesn’t judge you or your curls. We found the biggest five financial mistakes that trap almost everyone at some point in their lives.

“I do” Without a Frank Discussion of “The F Word (Finances isn’t what you were thinking)” The average wedding in this country costs $30,000. That is a lot of money, but it isn’t necessarily “a mistake.” One of the most grievous financial mistakes before taking the plunge into marriage is hiding from your partner the condition of your finances.

Everyone knows that money is the most frequent fought-about topic short of mayonnaise or Miracle Whip. To lie (and to withhold a truth is a lie) about debts or that little gambling habit you picked up in college is asking for trouble.

Not Saving For Retirement: Unless you are 14 years old (and if you are, good for you about your choice of reading material), if you haven’t thought about retirement, you should start. Saving the money to sustain you through your golden years seems a little daunting, but it isn’t. If you are employed, put 10% of your net (not your gross) income into a 401(k). Don’t ignore your employer match.

Not Saving For Retirement: Unless you are 14 years old (and if you are, good for you about your choice of reading material), if you haven’t thought about retirement, you should start. Saving the money to sustain you through your golden years seems a little daunting, but it isn’t. If you are employed, put 10% of your net (not your gross) income into a 401(k). Don’t ignore your employer match.

If your job benefits don’t include retirement, open an inexpensive IRA through a brokerage and investment firm such as Vanguard or Charles Schwab. You can get into one of those for an initial deposit as little as $1,000.00, and it takes less than 15 minutes to open one online. Then set up auto-contributions (about 10%) from each check. Keep the percentage constant as you get raises, and the money will grow that much faster.

Buying Too Much House: Millions of Americans have fallen into this one. Your job horizon looks shiny. The house is beautiful, and the price is right for a house that nice. But you can’t quite afford the combination mortgage, property tax and utilities. Buying a home is the biggest investment you will ever make. Be firm with yourself about how much you can afford, before it turns into one of the biggest financial mistakes you can make.

Failing to Plan for Your Children’s Education: Let me be one of the first to congratulate you on the birth of your beautiful child! Now start a college fund. College tuition has risen more than 1,000% since the Class of 1984 turned their tassels. It cannot wait.

Fortunately, there are programs such as GET (Guaranteed Education Tuition.) They spread the cost of tuition over almost two decades, saving Mom and Dad from sticker shock when the time comes to send your child off to school.

Dying Intestate: “You’re looking good,” becomes “You’re looking good for your age” before you know it. If that is you, the time has come to plan your will. If you die without a will, the state determines who gets what regardless of the needs of your family. And don’t let make your family “Unravel it later.” Families don’t do well under those conditions.

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