Bad Money Moves We All Make

All of us have made bad decisions in our life at some point, and we will likely make some more in the future. While it’s always a good idea to avoid these scenarios whenever possible, this is especially true when it comes to money.

Here are five money mistakes that are relatively common:

  1. Using high interest credit cards that offset the gains of low interest savings accounts. You would be better off taking out some of your savings to pay down the high interest debt in many cases.
  2. Paying for things that are new when a used item would do. Buying used and saving or investing the difference will yield a huge reward down the line.
  3. Not contributing to your company’s retirement plan. This is especially true when they are offering matching money. In this case, not investing is literally throwing away money.
  4. Borrowing to buy things that go down in value. Borrowing for a house or some other appreciating asset is usually fine, but taking out a loan or using credit on things that depreciate, such as clothing and cars, is wise to avoid.
  5. Paying full price for rarely used items. Things such as snow blowers and lawn mowers aren’t typically everyday items. You may not get your return on your investment in these cases, so form a buyer’s club or borrow one when needed.

One final note to consider: when you start making the right decisions and your savings start to increase, avoid the tendency to spend it on things you previously couldn’t afford. Instead, continue your disciplined decision-making into your future and save, plan, and budget your way to financial success.

About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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