December 10, 2023

Small Money Mistakes That Matter

People who are not very careful about their money can easily lose it. Even the smallest of mistakes can matter a lot. Well, there are some small mistakes that some people can overlook but can have a significant impact can cost them a lot considerably. Here are just some of the small money mistakes that matter.

Withdrawing your 401(k) when changing jobs

Some people make the mistake of trying to cash out their 401(k) contributions from their previous employer whenever they change jobs. Although it might give them some added cash on hand, the substantial future earnings as a result of caching out may be forever lost. What’s more, cashing in on your 401(k) early might come with costly charges that will further lessen the amount you will eventually get. A better option would be to roll over the funds into your personal IRA so that it will continue to grow.

Not paying off a small credit card balance for a long time

Even though you continue to pay for your credit card balance but just maintain the minimum monthly payment, it can affect you more in the long run. That is because it will take you longer to repay for your debt which can accumulate higher interest rate charges the longer they continue. In addition, it may also affect your credit score if the credit agencies seen a long standing credit balance in your credit history.

The best option for you is to try to pay up the balance as early as you can by stepping up on the monthly payments. You might also want to take out another loan with a lower interest rate that might help repay for the credit card balance you currently have.

Failing to pay off library fines and parking tickets

Although such things might be easy for people to overlook and forget over time, it can also be a mistake. Many US libraries and municipalities usually turn over unpaid debts to certain collection agencies in order to raise more revenue. Once this debt gets into the hands of the collecting agencies, it might also be reflected into your credit history. Such unpaid debts can lower your credit score by as much as 100 points, which then might affect your credit. Make sure that you get updated with your parking tickets or even library card fines and pay them promptly to avoid possibly lowering your credit score.

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