Life is busy. The squeaky wheel gets the grease.
You know what doesn't squeak? Your credit score. Your credit card debt. Your budget.
All of those little errors and omissions because life is busy.
But don't worry, here are six super-easy money mistakes you might be making that we can fix in a jiffy.
Table of Contents
1. Errors on your credit report
The Federal Trade Commission conducted a study in 2012 that found 1 in 5 people had an error on their report that was corrected after a dispute. 20% of people who identified an error and had it fixed saw an increase in their score.
Errors happen all the time. If you haven't reviewed your reports from each of the three bureaus, do it now by requesting your report from AnnualCreditReport.com.
Your credit score is one of the most important numbers in your life and it's based completely on your credit report.
2. Set and forget your 401(k)For many Americans, the 401(k) is the way you save for retirement. But how are you saving? When was the last time you reviewed your allocation or rebalanced it so your allocations are back to your targets?
If you're like me, you set it when you started working and you never went back. It's time to fix it.
Blooom will give you a free 401(k) review and offer recommendations based on your 401(k)'s investment options. If you want them to manage it, which is optional, it's only $10 a month to keep your 401(k) balanced and your allocations on track.
(while you're at it, maybe increase your contributions a little?)
3. Not having an emergency fund
Do you have an emergency fund? A 2016 report by the Federal Reserve showed that 46% of Americans would struggle to cover a $400 emergency.
If you haven't saved at least $1,000 (or six months of expenses), you don't have an emergency fund. Financial emergencies, big and small, happen all the time and it's important to give yourself a buffer.
If you want to find ways to save, we share 100 ways to save money or you can join Brightpeak Financial's free $500 Savings Challenge. It's free and they will give you ideas on how to save $500 in just 7 days.
Saving a bundle in the short term is great, it cuts the fat, but for the long term it's best to lean on a budgeting tool like Mint or You Need a Budget.
4. Shopping without a cashback app
We all know to use a cashback credit card but did you know there are a ton of apps that pay you rewards for the money you're already spending? My two favorite are Drop Rewards and Ibotta.
Drop Rewards is an app that gives you rewards based on your spending. All you have to do is link up a credit or debit card and it handles the rest. It's completely automatic and you earn rewards on top of whatever your credit card gives you.
Ibotta is an app that gives you cash for scanning your grocery store receipts. You unlock rebates for the items you buy, including generic products like fruits and vegetables, and you can cash out for cash or an Amazon gift card. You also get a signing bonus! Get a $10 welcome bonus when you sign up and redeem your first rebate!
Learn more about Ibotta (and get $10!)
5. Being appropriately insured
When you own a car, the law requires you to get insurance.
When you buy a house, the bank requires you to have insurance to get a loan.
But in many other areas, there's no mandate for insurance. Renters aren't required to get renter's insurance. No one is required to get umbrella insurance, long-term disability insurance, or life insurance.
Calamities happen all the time and insurance buys you peace of mind.
Life insurance is the trickiest because of how complicated it can be (term vs. whole, etc.) but it's essential. The simplest coverage, known as term life insurance which is paid out when you die, is often quite inexpensive.
6. Not having a money dashboard
What is your net worth? How much are you spending each month? How much are you earning?
A money dashboard is like the dash of your car. When you're in your car, a quick glance will tell you how fast you're going, how much fuel you have left, how fast the engine is running, plus a dozen other numbers and indicators you might need in a pinch. There's no searching, it's all there.
You should have a money dashboard for your money too – I recommend using Personal Capital if you're focused on your investments and Mint if you're focused more on budgeting and saving. Both are free, powerful in their own right, and important for your financial future.