Common Money Management Mistakes Homeowners Make & How To Avoid

Managing your finances isn’t as simple or straightforward as we’re led to believe, especially when the busy demands of work, home, and social life can impact how our money is allocated. However, some steps can be taken to streamline your spending without sacrificing necessities.

As a homeowner, it is your responsibility to make the wisest financial decisions for your household, but you don’t have to figure out your next steps on your own. We’ve put together a list of the common money management mistakes many homeowners make, so you can learn how to avoid the pitfalls.

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Exclusively Buying New

If you’re exclusively shopping for new items, whether it’s simple everyday items like clothing or major purchases such as a car, if you never take the time to look for deals, you’re missing out on significant savings.

Instead, look for ways to embrace pre-owned items. If you’re used to shopping at boutiques and brand name stores for your clothing, consider thrift shops and consignment stores where you’ll often find name brand products in great condition for a fraction of the cost.

Similarly, if you’re shopping for an investment piece like a car, there are plenty of used car lots that will likely carry the make and model you’re looking for with significantly lower monthly payments — just be sure to confirm the legitimacy of your dealer and that the car has been inspected thoroughly for safety features.

Keeping Yourself In Debt

Debt is one of those obstacles that can hinder your ability to provide for your household and enjoy the money you work so hard for. It’s important to look at your current balances and learn how you can start to pay down your creditors.

Lending experts like FlexMoney recommend consolidation efforts, which involve taking out a quick and convenient lump-sum loan to pay off multiple balances at once. What you’re left with is a single payment plan and interest rate, which can be easier to manage than multiple payments.

Equally as important is your ability to make more than your monthly payments. Simply paying off the bare minimum will only keep you in debt longer. If you’re struggling with your higher-interest payments, make a commitment to take more out of your spending and entertainment budget and make larger payments towards your debt, which will help you overcome your debt faster.

Costly Hobbies

Everyone wants to have an exciting social life outside of the home, but if your hobbies cost more than you can afford, you could be taking money away from investing in your household or your savings account. Commit to looking for free activities and events in your city, and you’ll be surprised how easy it is to still have fun with loved ones without spending more than you can afford.

No Savings Accounts

One of the biggest mistakes homeowners make is not having any savings allocated. Make a point to set up, if you don’t already have one, a savings account and allocate a portion of your income every month. If you require more accountability — set up automated transfers, so you’re never tempted to spend that money on anything frivolous.