If you don’t have an accounting or economics degree (and heck, even if you do) it’s easy to make mistakes with your money. This is especially true when it comes to investments. Here are some common money mistakes experts say to watch out for.
Missing out on “free money”
If your company offers a retirement plan but you aren’t putting money into it, you’re probably leaving cash on the table. Many employers participate in a matching program, too. This means your employer contributes to your retirement plan, too, usually up to a certain percentage of your salary. This is a great way to make sure your retirement is secure in the future and take advantage of what is essentially “free money.”
Fortunately, if you didn’t or weren’t able to take full advantage of retirement plans during your younger years, there are several ways for older adults to catch up on savings.
On the other hand, if you receive a big tax return every year, you might want to adjust your W-4. By adjusting your withholding, you can put the extra money you’d get in your tax return back into investments. It might be disappointing in the short term, but it can be more rewarding in the long run.
Keeping a timeshare you don’t use
If you bought a timeshare when you were younger and are regretting it now, you’re not alone. In fact, the timeshare industry brings in $9.2 billion in annual revenue, which is more than Major League Baseball. When you buy a timeshare, you become partial owner of a vacation property. Unfortunately, you’re also buying indefinite, expensive fees on a property that isn’t an “investment” in the way buying a house is.
On average, the price for a one-week timeshare costs vacationers almost $21,000, plus yearly maintenance fees. In 2012, the average yearly maintenance fee for a timeshare was about $660. Now, average maintenance fees are closer to $1,000 per year. Fortunately, if you’re ready to get rid of your timeshare, finding help is simple.
Settling on your bigger expenses
Using coupons and buying items when they’re on sale is a good strategy, but it shouldn’t be your only strategy. Couponing can stretch your budget pretty far (especially if you’re into extreme couponing). However, it’s wise to step back every now and then and reexamine your biggest expenses. For many people, this typically includes things like mortgage, car, and insurance payments. It may be difficult to lower your car payments. Still, it might be worth checking out whether you can secure lower rates on your mortgage and insurance.
Though we think of mortgages as a one-time investment, you might find you’re able to save thousands over time with a simple refinance. If you’ve had your auto insurance for a long time, you might be able to save more than you think.