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11 Basic Money Mistakes You Might Be Making (But Could Easily Avoid)

There’s so much advice about what you should or shouldn’t be doing with your money that it can be hard to determine what’s essential.

But the truth is that some money moves matter. Here are some mistakes you want to avoid, and what to do instead to get ahead financially.

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1. Spending more than you earn

If you spend more than you earn, it could impact your finances for years to come. Overspending can become a habit and negatively impact your savings or lead to unnecessary debt.

But even beyond that, you could end up falling for the trap of lifestyle creep and begin living beyond your actual means.

Instead, try to stick to a budget. That doesn’t mean you can’t have fun, though. You can still find ways to enjoy life without breaking the bank.

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2. Not having the right insurance

Insurance might not be exciting, but it’s vital. If you don’t have the necessary insurance, you could pay hundreds or thousands of dollars to cover situations that could have been insurance claims.

Homeowners insurance, renters insurance, auto insurance, life insurance, health insurance and pet insurance are all types of insurance you might want to consider depending on your circumstances.

3. Not saving for retirement

It might not be the most enjoyable task, but saving for retirement is one of the most important. Preparing for retirement is a great way to care for your future self.

If you don’t save, you’ll probably have to deal with the consequences later. Instead, do yourself a favor and save now. Every dollar counts, and you might even find yourself trying to retire early.

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4. Missing your employer’s matching contribution

Some employers offer a 401(k) contribution match, to a certain percentage. Here’s how it works — you put 3% of your salary in your retirement account, and your employer matches it with an additional 3% contribution.

Not all employers offer it, and the maximum contribution varies, so read your onboarding documents. But it’s an easy way to save extra money towards retirement and increase your employee benefits.

5. Comparing yourself to others

It’s tempting to compare yourself to other people. Whether you are comparing your finances and thinking that the other person is doing better or worse, it can be challenging.

Even beyond that, comparisons can sidetrack you from your money goals. Here’s the thing — you’re on your financial path, and it’s okay if that looks different from other people’s.

6. Never save an emergency fund

It’s challenging to save an emergency fund but worth the effort. If you don’t have one, you might turn to credit cards or other types of loans in emergencies.

But if you have an emergency fund, you can use that money instead to keep yourself in a good financial position.

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7. Buying a house that is too expensive

It’s hard not to get wrapped up in the house-hunting process. After all, it’s probably the largest purchase you’ll ever make.

But you want to avoid one house-hunting mistake: a house that is too expensive. The last thing you want is to feel stressed about money for years to come. Instead, opt for a house that falls within your current budget.

If the home that fits your budget isn’t exactly what you envision, you can always start renovations down the road.

8. Not shopping around for providers

Whether it’s an insurance or healthcare provider, it’s usually a good idea to shop around. If you don’t, you could pay more for the same service.

Over the years, the extra expense can add up and dent your savings. That’s why comparing prices and quotes might be a good idea.

9. Procrastinating the budget process

Budgeting gets a bad reputation, but it can be a handy tool. If you don’t have a budget, you might be overspending each month, saving less than you could, and not clearly understanding your finances.

If you can take some time to make a budget, you can help create a clear picture of how much you earn, spend, and save.

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10. Forgetting to check your credit report

You can check your credit report for free once each year at AnnualCreditReport.com. Even if you don’t have any concerns about your score, it’s a good idea to check for errors or fraud.

If you don’t, you could deal with a stressful situation later. But luckily, it’s easy to check your report and doesn’t take long.

11. Waiting until tomorrow to start

Life is busy, and tell yourself that you’ll start focusing on finances tomorrow or the day after that can be tempting.

But if you make a habit of that, years can pass. Instead, make time to prioritize your finances. You might be able to avoid some stress in years to come.

Bottom line

It’s impossible to perfectly manage your money, and perfection doesn’t need to be the goal. Instead, focus on small steps to improve your finances now and in the future.

By avoiding these costly mistakes you have the potential to keep more money in your wallet and put yourself in a stronger financial position over time.

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This article 11 Basic Money Mistakes You Might Be Making (But Could Easily Avoid) originally appeared on FinanceBuzz.