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Anthony Fallahi discusses Major Money Mistakes and How to Avoid Them
Saving money is vital for everyone, but it can be tough to do sometimes. Anthony Fallahi, a Certified Financial Planner and financial wellness expert in Dallas, TX, knows many people may make the same mistakes repeatedly when trying to save money, putting their future goals and dreams at risk. We will discuss some of the most common money mistakes and how to avoid them. Follow these tips, and you'll be on your way to savings success.
Not Having a Budget
“Not having and sticking to a household budget is by far the most common money mistake out there”, says Anthony Fallahi. Without a budget, tracking your spending and ensuring that your expenses align with your financial goals can be challenging. This can lead to overspending in some areas and under saving in others.
Without a clear picture of your financial situation, making informed decisions about your money can also be challenging. For example, you may be unaware of how much you spend on unnecessary items or how much you could earn by investing in a different savings vehicle.
“Make use of the great tools out there to automate as much of this as you can”, recommends Fallahi. “There are products in the market like Mint and YNAB that will do a lot of the heavy lifting for you. Many of them are free to use.” By tracking your spending and setting financial goals, you can control your money and ensure that every dollar is working towards achieving your long-term objectives.
Buying Stuff You Don't Need
One of the most common mistakes any of us make when trying to save money is buying things we don't need. Whether an expensive new gadget or a designer handbag, we've all been guilty of allowing impulse purchases to derail our plans.
While there's nothing wrong with treating yourself occasionally, it's important to be mindful of your spending. Before you buy something, ask yourself whether it's something you need or if you can live without it. You'll often find that you don't need the item as much as you thought you did.
Fallahi suggests planning for the occasional indulgence is more realistic than trying to cut out all unnecessary spending. “Budgets are often abandoned because they feel too constraining. You can achieve your financial goals and pamper yourself every now and again. You just want to plan for it.”
Paying Too Much on Subscription Services
Another common mistake people make is paying for subscriptions they no longer use. This can include everything from cable TV to gym memberships. “One of the first things I always do with my clients is make a list of every active recurring payment. There are invariably 1 or 2 that had long been forgotten”. Cancelling those unused services can add up. “Your credit card provider likely has tools to help you see where your money is going. You might also consider more hands-on services like TrueBill to keep track of everything.”
For the things that you know you can’t live without, like your cell phone or car insurance, make sure you are checking the market often. With so many service providers, knowing if you're getting the best deal can be difficult. However, you can take a few simple steps to ensure you're not overpaying for services.
First, research the prices of different service providers in your area. Second, compare each provider's features and benefits to see which offers the best value for your needs. Finally, don't hesitate to negotiate with your service provider for a better rate.
Not Taking Advantage of Discounts and Deals
Many people fail to take full advantage of the discounts and deals for which they may be eligible. “It takes a little bit of forethought”, says Fallahi, “but I have found that the most successful savers have made bargain-hunting a part of their everyday process.”
One way to find discounts is to join mailing lists for your favorite stores. This way, you'll be among the first to know about sales and special offers. You can also search for coupons online before making a purchase. Some websites offer printable coupons for a variety of stores and products.
Another great way to save money is to take advantage of loyalty programs offered by many retailers. These programs offer rewards such as cashback or points that can be redeemed for future purchases. “If you are a student or over the age of 65, there are many ways to reduce your cash output just by asking for a discount. Also make sure to review the free and subsidized services offered through your municipality. Community Rec centers are often as good or better than private gyms and generally cost less. If you haven’t been to your local library in a while, you will be amazed by the free resources available there.”
Overspending On Groceries
One of the most significant expenses for many families is groceries. Rising food prices make it difficult to stick to a budget when grocery shopping. However, you can follow a few simple tips to avoid overspending on groceries.
First, make a list of the items you need before you go to the store. This will help you to stay focused and avoid impulse buys. Second, compare prices between different stores before making your purchase. This way, you can be sure you're getting the best deal possible. Finally, don't be afraid to buy generic brands or items in bulk when they are on sale.
Another common mistake people make when trying to save money is wasting food. According to the USDA, the average family wastes between $28 and $43 in food each month.
There are a few simple ways to avoid wasting food. Plan your meals ahead of time and only buy the ingredients you need. This will help you to avoid buying things you won't use. Second, store leftovers in airtight containers and eat them within a few days. Finally, compost any kitchen scraps instead of throwing them away. “If you struggle with throwing food out each week like I do, a food delivery service like HelloFresh or Blue Apron may make sense”, suggests Fallahi.
Bottom line: if you want to save money, you need to be smart about it. And that means being aware of the mistakes that are holding up your progress and taking steps to avoid them. Creating and sticking to a budget, buying only what you need, taking advantage of discounts and deals when you can, and watching your spending on groceries and other household items will pay enormous dividends in the future.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes.