With 2016 finally here, you need to ensure that you are looking at money mistakes to avoid in 2016. For many people, the New Year means making new resolutions, and often these resolutions are meant to help them financially. With this being said, here are some common mistakes people make that could be putting a damper on their financial resolutions for the New Year.
[Read: Avoid These Mistakes When Trying To Save Money]
Money Purchases to Avoid
There are several money mistakes to avoid in 2016 that deal with purchases that you may be tempted to make throughout the year. Two of the more major purchases that people often consider is:
- Buying a new car
- Buying a new home
These are big expenses, and while it may be great to have something new, think of the overall cost. For example, buying a new car means losing 9% once you drive off the lot. Plus, since this is a brand new car, chances are you are paying interest on a loan for this car. Instead, consider buying a well maintained used car if a new vehicle is needed. When it comes to the house that you live in, do you really need to splurge on a new home? What is the reasons for moving? If there is no reason other than you are ready for a new home, be sure that you consider the financial implications that this decision is going to have.
Your Debt to Money Ratio
A huge money mistakes to avoid in 2016 is going to deal with your debt and money ratio. IN particular:
- Not paying off your debt
- Living from one paycheck to the next
Too many people do not realize the huge mistake they are making when they are not serious about paying off their debt. This debt will continue to accumulate, and can cause greater issues later down the line. Instead, people should have a plan for how to deal with their debt and ensure this does not become an issue. In addition, not dealing with your debt can result in living from paycheck to paycheck. If this is the case, and you want to ensure that this not a money mistakes to avoid in 2016 battle, consider:
- Putting at least 1% of what you earn in a savings account
- Look at long term investments
- Use your money wisely to get out of debt
- Pay with cash rather than credit
Another important money mistakes to avoid in 2016 associated with your debt and money ratios is tracking your expenses. Too many people do not do this, and at the end of the month they are surprised to see that they do not have the funds that they thought they would. It is best to ensure that you writing down what you spend, right when you spend it. This will allow you to have a more accurate look at your spending.
Your Financial Goals
It is best to write down the financial goals that you have for 2016 so that you can know a game plan for how you need to proceed. Too many people do not write down their financial goals, thus they are easy to forget when the times comes for a major purchase or the like. It has been shown that in order succeed at any financial goals that you have, you should write these down. This makes you more conscious of what you need to do in order to succeed with these goals. One of the biggest money mistakes to avoid in 2016 is not realizing and implementing these financial goals.
A huge part of your financial goals should be your retirement. Do not put yourself into the place in which you have no retirement. Sadly, this is what is happening to many people as they are not taking advantage of the matching feature their employer may have for their 401k. You should be sure that you are taking advantage of this benefit. It is estimated that there are around $24 billion in unclaimed funds per year that were meant to be put into 401k plans to match. This is a huge amount of money that people are losing out on. Therefore, be sure to check with your company to see if they match and if they do, sign up for this.
[Read: Avoid 4 Common Mistakes to Save Money]
To make the most of your financial new year, be sure that you are abiding by the rules. Money mistakes to avoid in 2016 can ensure that by the end of the year, you are more financially stable, have less debt, and that your retirement plan is up to par with where you want to be come 2017. Too many people do not look at the mistakes that they are making, and in the end they are sorry. They may have more debt than ever, and be looking at what they can do in order to make their lives better, but this can be avoided.