June 23rd, 2011
In her article, “Is Being Lazy Costing You Money,” Vera Gibbons discusses some mistakes people make that harm their financial situation. As foreclosure and bankruptcy are on the rise, banks and lenders aren’t as trusting as they used to be, and qualifications are tight. Whether you’re considering a mortgage now or later, these mistakes could cost you your dream home in the future.
Failing to determine financial goals. Having financial goals is just as important as having life goals, especially now that times are tough. If owning your own home is one of those goals, you’re eventually going to need a large chunk of money for the down payment. As Gibbons says,
Many consumers are leading a “spend as you go lifestyle” and that’s not productive because the bottom line is that we’re much more inclined to save when we’re saving for something specific, whether a home, or college tuition, for example.
Make goals and stick to them, even if it means putting 20 dollars aside each week. At the end of the year – when you’re $1,000 closer to your goal – you’ll be surprised at how little you missed that money, and how good it feels to be on track.
Being disorganized. It’s a recipe for disaster. If you’re not organized, you’re bound to pay a bill late, which racks up your late fees and interest rates, and hurts your credit score.
Find a system that works for you: if it’s difficult having some paper bills, and some paperless bills, try keeping all bills as either one or the other. Set up automatic withdraws on monthly accounts when possible. Keep a planner, and take the time to sit down and mark all payments on their due dates. Find what works, and stick with it. Otherwise you’ll pay for it in the long run.
Not knowing your credit score. Your credit score is more important now than it’s ever been, and it has an enormous impact on your financial future. Not only should you know your credit score, you should be checking your credit report at least once a year. (For a free credit report, visit annualcreditreport.com) Honestly, take 5 minutes to do it right now. Credit fraud is ramped, and it can take years to clear up. Better to be safe than sorry.