In this article, we provide five common financial mistakes. Start the year off right by learning what not to do. Below is our list of five common financial mistakes to avoid in 2025.
1. No Emergency Fund
Imagine owning a large facility with hundreds of employees without an emergency evacuation plan. What would you do if the building caught on fire? Having no emergency preparation not only affects you but also those in your care or your circle. An emergency fund is even more important when you have a family or business.
2. Excessive Credit Card Debt
If you currently have or have ever had debt, then you know that it can be a constant burden. Debt might seem unimportant initially, but once it exceeds a certain dollar amount it might feel impossible to pay off. Consider using a debit card to reduce the temptation to spend carelessly, since money will leave your account immediately. If you do use a credit card, be sure to pay it off regularly every month.
3. Housing Overspending
Housing costs can rapidly add up, so buying a house above your means is a mistake. Assess your income and expenses before a big purchase. Additionally, consider having a big financial cushion in case you lose your job before making such a big decision.
4. No Credit Oversight
Monitor your credit score and use sites like Experian, Transunion, and Equifax to update your credit report information. For instance, be sure to update your address if you moved or to place a fraud alert on your account if your belongings were lost or stolen. These proactive measures save time, energy, and stress.
5. Unnecessary Subscriptions
Canceling unnecessary subscriptions can save you hundreds of dollars per month. For example, let’s say the following are your monthly subscriptions:
- Music streaming: $10 per month
- Meal kit plan: $15 per month
- Gym membership: $30 per month
- Magazine plan: $5 per month
- App service: $10 per month
- Shipping plans: $30 per month
- Pet services: $10 per month
By canceling three of the seven categories—the gym membership, the shipping plans, and the meal kit plan, you save $75 per month. In total, this amounts to $900 per year!
What did you think of these five common financial mistakes? Did we miss anything? Let us know in the comment section below!
Until Next Time!
– The Free Play Lotto Team!
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