Got 5 Minutes? 5 Money Mistakes You're Probably Making (and How to Fix Them)
When it comes to your finances, do you take a head-on or head-in-the-sand approach? If you identify with the latter, the good news is you're not alone. The bad news? You're not alone. Data suggests that when it comes to managing money, women are not as independent as you'd expect. In fact, 91% of women in heterosexual couples are not participating in financial decisions. But we want to change that statistic. To help you become a master of your own finances, we're debuting a new series called The Paper Files, where we uncover tricks and tips that will help you manage your money and your future. Ready to take it head-on?
If just the thought of checking your bank account's balance fills you with anxiety, you're not alone. According to a recent survey, 30% of Americans are "constantly" stressed out about money. We get it: Amid calculating a realistic percentage to save out of each paycheck and deciding on a sensible retirement plan, managing your finances is a daunting task.
To start small, we asked Keri Danielski, a consumer finance expert at Mint and Turbo, to share five easy yet impactful ways you can improve your financial standing in as little as five minutes. From starting a rainy day fund to putting aside dollars for retirement, here's how to tackle some of the most intimidating tasks on your financial to-do list in almost no time at all.
Ready to take control of your money? Here are five financial mistakes you can fix today, even if you only have five minutes to spare.
If You Have Five Minutes
The money mistake: Not having a rainy-day fund.
How to fix it: "Given that it's so rare nowadays for people to carry cash on them, when you do, it almost feels like a burden," explains Danielski. "Well why not turn it into a rainy-day fund? Whether you have extra cash from the previous night out or you just did a couple loads of laundry, saving it in a place you'll remember, or even in an extra bank account, can make saving easy," she recommends. "We know that most people are still intimidated by saving and think it's hard to start, but little do they know all it takes is five minutes to set aside extra cash."
If You Have 15 Minutes
The money mistake: Not knowing where you really stand financially with lenders.
How to fix it: "Most people don't know where their financial profile stands—they have no idea what their credit score is, let alone their debt-to-income ratio or actual verified income," divulges Danielski. "With free tools like Turbo, you're able to see your credit score, income, and debt for a more complete picture of your total borrowing and savings power," she offers. "These numbers are critical in learning how lenders view you, and your household, and can empower you to make important changes when it comes to finances," she adds. "For each of your numbers, learn the 'whys' behind them, note the key takeaways, and view comparisons to other people like you."
If You Have 30 Minutes
The money mistake: Wasting large sums of money.
How to fix it: "Here's a mistake I've certainly made before: You get a big lump sum of money and you spend it all. Who isn't guilty of this?" asks Danielski. "Many people get this opportunity every year with tax refunds, which averaged about $2900 this year. If you get a refund, don't waste it," she advises. "All it takes is an easy 30 minutes to see where you can leverage it by paying down debt, increasing your productivity, or adding to your savings."
If You Have One Hour
The money mistake: Not saving for retirement.
How to fix it: "One of the easiest (and most important!) things you can do for your future is save for it," says Danielski. "With more and more employers offering competitive super funds, it's easy to just go with what's on offer. But we suggest comparing fees, and sticking with one account. In this case, it's best to do your research. And if you have multiple, consolidate them ASAP."
If You Have Half a Day
The money mistake: Overspending.
How to fix it: "Okay, this one requires a little more time and thought put behind it," confesses Danielski. "We all tend to overspend, whether it be on dinners out, new shoes, a vacation, activities for the kids, etc.—it's not so easy to keep spending in check," she says. "You need to be able to set limits with your spending, and the best way to do so is in creating a budget," she adds. "With apps like Mint, you can figure out your total income and then track your spending to see where you can cut back."
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