6 Common Money Mistakes We All Make (and How to Fix Them Fast!)

My first job out of college was with a defense contractor that required I get a security clearance.

If you’ve ever been through the process, you know how scary it can be. You have to fill out a form detailing every place you’ve lived, every place you visited, anyone you’ve had “close and continuing contact with” and about a million other things.

So I was nervous when the investigator asked to meet with me about my form. He asked me whether I had made any omissions on my SF-86, the form you fill out for the security clearance, and I said no. Then he asked if I ever lived in Allentown, Pennsylvania. I hadn’t. That’s when he pulled out my credit report and it showed an Allentown, PA address!

How in the world???

The credit bureau had made a mistake and it had cost me a few months of investigative time! Not only did it cost them time, but it also cost me time to get it fixed. They wouldn’t move on off the address issue until it was fixed.

Ugh.

Life is busy. The squeaky wheel gets the grease.

Do you know what doesn’t squeak? Your credit report!

Don’t be like me. Don’t let these little mistakes cause bigger problems in the future. All of those little errors and omissions because life is busy will make life busier. And maybe even cost you a few bucks in the process.

But don’t worry, here are six super-easy money mistakes you might be making that we can fix in a jiffy.

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.

Recommended fix: Check your credit reports (use our Waterfall Method) but also sign up for Credit Sesame (free) to monitor your score in the process.

From now until an indefinite period, as a result of Covid-19, you can check your credit reports from Equifax, Experian, and TransUnion every single week.

Join Credit Sesame

2. Not having a money dashboard

What is your net worth? How much are you spending each month? How much are you earning?

If you need help getting your budget in check, check out You Need a Budget. It’s more than a budget tracker, it’s an entire budget system that will get you back on track and saving a ton of money each month.

As for tracking, a money dashboard is like the dash of your car. When you’re in your car, a 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.

Recommended fix: 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.

Get a free dashboard from Personal Capital

3. 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.

4. 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. (here are alternatives to an emergency fund that you can use while you fund it)

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 strategies tool like Mint or You Need a Budget.

Recommended fix: Start an emergency fund and put it in an online savings account to give it a better interest rate.

5. 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 favorites are Shopkick for in-person shopping and Topcashback for online shopping.

Shopkick 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.

Learn more about Shopkick

When shopping online, make sure you get a cashback shopping portal you love – my vote goes to Topcashback. They will give you $15 into your account and you can cash it out once you reach $10 in cashback.

Get $15 from TopCashBack

6. Not having the right insurance

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 (if this is you, consider Lemonade). No one is required to get umbrella insurance, long-term disability insurance, or life insurance. (but don’t wait, life insurance gets way more expensive as you age)

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.

Recommended fix: Get a quick quote from Ladder and see how much life insurance will actually cost you. You may be surprised at how affordable it is.

Get a quick quote from Ladder

Make these fixes today and you’ll find yourself in great financial shape in the future!

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About Jim Wang

Jim Wang is a forty-something father of four who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools, everything I use) is Empower Personal Dashboard, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

>> Read more articles by Jim

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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I use the Credit Karma app to check my credit. It updates every week and is free. I had a mistake corrected a while back and the process was rather straightforward. I didn’t have to mail in anything, just filled out a form online and poof! the erroneous collection was removed.

6 years ago

Having an emergency fund is so important! It’s the one thing that enables my family to do the things that we want to do. It’s not “crazy” to take off for a few months knowing that you have a fully funded emergency fund to fall back on, if needed. Thanks for the great reminders!

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