Top 10 Most Common Financial Mistakes People Make

Here is the top 10 most common financial mistakes people make
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Top 10 most common financial mistakes people make:
#1 Excessive Frivolous Spending
Great fortunes are often lost one dollar at a time. 
It may not seem like a big deal when you pick up that double-mocha cappuccino, stop for a pack of cigarettes, have dinner out or order that pay-per-view movie, but every little item adds up. 
Just $25 per week spent on dining out costs you $1,300 per year, which could go toward an extra mortgage payment or a number of extra car payments. 
If you're enduring financial hardship, avoiding this mistake really matters – after all, if you're only a few dollars away from foreclosure or bankruptcy, every dollar will count more than ever.
#2 Never Ending Payments
Ask yourself if you really need items that keep you paying every month, year after year. 
Things like cable television, music services or fancy gym memberships can force you to pay unceasingly but leave you owning nothing. 
When money is tight, or you just want to save more, creating a leaner lifestyle can go a long way to fattening your savings and cushioning yourself from financial hardship.
#3 Living On Borrowed Money
Using credit cards to buy essentials has become somewhat normal. 
But even if an ever-increasing number of consumers are willing to pay double-digit interest rates on gasoline, groceries and a host of other items that are gone long before the bill is paid in full, don't be one of them. 
Credit card interest rates make the price of the charged items a great deal more expensive. 
Depending on credit also makes it more likely that you'll spend more than you earn.
#4 Buying A New Car
Millions of new cars are sold each year, although few buyers can afford to pay for them in cash. 
However, the inability to pay cash for a new car means an inability to afford the car. 
After all, being able to afford the payment is not the same as being able to afford the car. 
Furthermore, by borrowing money to buy a car, the consumer pays interest on a depreciating asset, which amplifies the difference between the value of the car and the price paid for it. 
Worse yet, many people trade in their cars every two or three years and lose money on every trade.
Sometimes a person has no choice but to take out a loan to buy a car, but how much does any consumer really need a large SUV? 
#5 Spending Too Much On Your House
When it comes to buying a house, bigger is not necessarily better. 
Unless you have a large family, choosing a 6,000-square-foot home will only mean more expensive taxes, maintenance, and utilities. 
#6 Using Home Equity Like A Piggy Bank
Your home is your castle. 
Refinancing and taking cash out on it means giving away ownership to someone else. 
#7 Living Paycheck To Paycheck
In March 2018, the U.S. household personal savings rate was just 3.1%, according to Federal Reserve data. 
Many households are living paycheck to paycheck, and an unforeseen problem can easily become a disaster if you are not prepared. 
The cumulative result of overspending puts people into a precarious position – one in which they need every dime they earn and one missed paycheck would be disastrous. 
This is not the position you want to find yourself in when an economic recession hits. If this happens, you'll have very few options. 
#8 Not Investing
If you do not get your money working for you in the markets or through other income-producing investments, you cannot stop working - ever. 
Making monthly contributions to designated retirement accounts is essential for a comfortable retirement. 
#9 Paying Off Debt With Savings
You may be thinking that if your debt is costing 19% and your retirement account is making 7%, swapping the retirement for the debt means you will be pocketing the difference. 
But it's not that simple. 
In addition to losing the power of compounding, it's very hard to pay back those retirement funds, and you could be hit with hefty fees. 
With the right mindset, borrowing from your retirement account can be a viable option, but even the most disciplined planners have a tough time placing money aside to rebuild these accounts. 
When the debt gets paid off, the urgency to pay it back usually goes away.  
#10 Not Having A Plan
Your financial future depends on what is going on right now. 
People spend countless hours watching TV or scrolling through their social media feeds, but setting aside two hours a week for their finances is out of the question. 

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