Some of the most common things people keep doing wrong with their money and suggestions on how to correct it

Some of the most common things people keep doing wrong with their money are:

• Spending beyond their means
• Overcharging on credit cards
• Trying to time the market (when to buy and sell investments)

Suggestions on how to correct these mistakes and avoid repeating them in the future:

Spending beyond their means:  Because many people are now required to either work longer hours or do more work in the same amount of time as they used to, they sometimes feel “entitled” to reward themselves. This “reward” usually comes at an unreasonable cost. Instead, don’t lose sight of the bigger picture. Have a vision of where you want to be financially in one, three and five years. Compare your after-tax income to your fixed expenses (rent or mortgage, insurance, utilities, etc.). Once you see the amount of discretionary income you have, focus on your goals and allocate the money appropriately. Evaluate your progress quarterly and make any adjustments needed. For your short-term “rewards” find low cost to no cost options and always keep your future goals in front of you.

Overcharging on credit cards:  Usually, when someone overcharges on credit cards it is because they do not have the money they need when they need or want it. Once again, this can mean spending beyond your means. I suggest canceling all credit cards except one.  That one card should only be used for emergencies. Have an agreement with your spouse, significant other or just with yourself as to what constitutes “an emergency” and that you will not use the credit of any kind unless this type of emergency occurs.

Trying to time the market (when to buy and sell investments):  Is has been proven time and time again that no one really knows when is the right time to buy or sell in the market and many people lose more by trying. Instead, before you begin, have a plan and stick to it. My first rule of thumb is that no money should be in the market unless you can leave it there a minimum of five years. For any longer-term money first, develop a strategy on how and when you will invest and how and when you will change your investments and investment plan.