No individual or business is entirely immune to making mistakes with their money, especially because it can be easy to do without realizing it. Many financial mistakes start small but can quickly grow if not addressed proactively and can become more difficult to bounce back from. In order to maintain stability and long-term financial confidence, here are several financial mistakes to avoid in 2023.
Delaying Saving for Retirement
If you’re able to afford it, it is wise to max out your retirement account when you can. Taxpayers under 50 years old can contribute up to $6,000 per year and those over 50 can contribute an additional $1,000 per year as part of their catch-up contributions.
Even if you aren’t able to max out your account for the year, it’s still important to make contributions whenever you can. For those in their earlier years, retirement savings can seem lower on the priority list than more “immediate” financial needs like college funds and student loans, paying rent or mortgage, and everyday expenses. However, the less you prioritize retirement savings earlier in life, you may have to rely on working years longer than you’d like to. Plus, saving for retirement earlier on provides your money more time to grow.
Failing to Check Your Bank Accounts and Credit Card Statements
It can be easy to take quick glances at both your bank account balances and any credit card statements you have to check your overall balance or your total payments due simply. However, taking a detailed look at these accounts can help you avoid any errors or duplicate charges you did not make, identifying any excess spending you can cut down on, and more. It will also keep you well aware of the amount of funds or cash flow you have access to which can help you avoid overdraft fees, ensure you have enough of a cushion for emergencies, and mitigate risks of fraud or identity theft.
Avoiding Paying Off Debts
Growing debt can be overwhelming, but it’s critical to be as proactive about paying off outstanding balances as possible. Making minimum payments means that the debt is always increasing and interest is continuously accruing on the loan. Making minimum payments may be the only option in some situations, which is much better than avoiding payments entirely. However, whenever you can, aim to pay off outstanding balances in full on or before their due date.
Not Taking Advantage of Automatic Payments
Choosing not to turn on automatic payments is not so much a mistake, but doing so can be incredibly helpful in avoiding late payments, missing bill statements in the mail, etc. Additionally, you can turn on automatic contributions towards retirement and investment savings that come directly from your paycheck each month, which ensures you are putting money into the market on a consistent basis.
Talk to a Professional
There’s no need to stress about making financial mistakes, it’s simply a good idea to stay aware and proactive. If you need a little extra guidance to make sure you’re on the right track, the expert team at Republic Bank has you covered. We partner with Ameriprise Financial Institutions Group for on-site financial planning, comprehensive investment solutions, and convenient digital capabilities. Our financial advisors and bankers are ready to help make 2023 your best financial year. Reach out to us today at 800-526-9127.