No one sane wants to ruin their future. Often we make choices either consciously or not that can harm our future. There is no magical solution that will instantly solve your problems. Here are some things to avoid that will be toxic to your future.

Ignore what you spend: Have you ever got money from the ATM machine and threw away the receipt without looking at it? Do you not open bills because you’re afraid to see what the balance is? You can’t help yourself by ignoring the problem. Try keeping all the receipts you have from one week. Even for small purchases under $5. At the end of the week, see want you spend on everything. I’d put it on a Excel spread sheet and make a pie chart and a bar chart. What’s your biggest expense? How much does it cost you? If you’re not into that, use a free service like Mint to help you track your spending.

Don’t bother with a budget: Many people don’t make budget because they think they’re boring, unhelpful, or restraining. The purpose of budgets is to give you freedom to spend money without feeling guilty. The restarint from budgets is coming from restarining you from more debt. You don’t have the money, you can’t do something, but you’re also not going  into debt.

Only make minimal payments: The only way I can explain this in words is that you’ve basically decided to sign an agreement with the credit card to make them rich with your money while keeeping your self poor. Check out Bankrate.com’s minimum payment calculator to get proof of what I’m saying.

Paying late or missing payments: So you may have needed some money to go out and eat and use you the money that was set aside for the credit card or you may have skipped it, not a big deal, right? Credit card companies make a killing when this happens, you’re even a day late, most cards will charge you $39 and it’s gets bigger when interest is calculated. By having a poor payment record, you’re also descresing your FICO score which determines your artes for car loans and mortgages. It’s a huge loss for you and a big gain for them.

Use your credit card as an emergency fund: One great thing about credit cards is that you can use when your car breaks down on the highway and you need a tow and there’s not enough cash in your wallet.  If you have that cash in savings, you’d immediately pay your card and you’ll have no interst to pay.

An unwise way of spending your credit card is piling every ‘emergency’ on it.  You add interest on top of all those bills and you can be crippled for a very long time. Start an emergency fund. A first goal is to save enough to cover monthly bills, then youre next goal might be 2-3 months.

These aren’t magic bullets, but they are a great starting point on getting out of debt, building your savings, and protecting your credit.  Do you have more common mistakes people make that can ruin their future? Leave a comment because we can always learn something.

Photo Credit: stanrandom

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