Personal Money Management involves the whole idea of managing individual and family finances, taking responsibility for your current and future financial situation, and setting financial goals.

Including the handling of individual financial tasks and being able to save for emergencies not getting control of your personal finances can leave you unprotected when a crisis comes along,

whether it’s an illness, an unexpected job loss, or the death of the family breadwinner.

As a reminder the Pandemic which began in March 2020 had showed these issues in sharp relief and showed the importance of planning for Emergencies.

Many fortunes have been lost by literally one dollar at a time and at first it may not seem like such a big deal but when you pick up we’ll say that double-mocha cappuccino.

Maybe having dinner out or order a pay-per-view movie note that every little item adds up. Just $75 per week spent on dining out costs you nearly $4,000 per year, which could go toward an extra credit card or auto payment or several extra payments.

If you are enduring a financial hardship, avoiding mistakes really matters and if you’re only a few dollars away from a foreclosure or bankruptcy, every dollar will count more than ever.

• Never-Ending Payments:

Things like cable television, music services, high-end gym memberships etc.; Services that make you steadily pay while leaving you owning nothing.

So, ask yourself, do we really need these kinds of items that keep you paying every month and year after year?

There are times where money can become really tight and some adjustments to your lifestyle will be necessary. By creating a leaner lifestyle can be very helpful to aid you in creating a cushion for yourself.

It can also help in being able to save more of your money and help prevent you from falling into a financial hardship situation.

•  Living on Borrowed Money:

Using credit cards to purchase essentials has become a somewhat commonplace even More so in today’s world.

But there are still an ever amount of increasing consumers that are willing to pay the double-digit interest rates on things like gasoline, groceries,

and a host of other items that are gone long before the bill is paid in full, doing this is not wise financial advice.

Credit card interest rates make the price of the charged items a bigger deal and more expensive and in some cases, using credit to buy things can also mean that you will spend more than you earn.

• Buying a New Car:

There are millions of new cars sold each year, but there are only a few buyers that can afford to pay for them in cash. However, the inability to pay cash for a new car can also mean 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. And by borrowing money to buy the car, the consumer then pays the interest on what is a depreciating asset, which definitely amplifies the difference between the value of the car and the price paid for it.

And the worse thing yet is that many people trade-in their cars every two or three years and lose money on every trade.

Also, there times where a person has no choice but to have to take out a loan to buy a car, it is important buy thing within reason such as: How many consumers really need a large SUV?

Large SUV vehicles are expensive to buy, Insure and fuel. Unless you tow a boat or trailer or need an SUV to earn a living, it may be not in your best interest to purchase one.

If you need to buy a car and/or borrow money to do so, consider buying one that uses less gas and costs less to insure and maintain.

Cars in general are expensive, and if you’re buying more of a car than you need, you might be burning through money that could have been saved or used to pay off debt.

• 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. Do you really want to put such a significant long-term dent in your monthly budget?

• Using Home Equity Like a Piggy Bank:

Refinancing and taking cash out of your home means giving away ownership to someone else. In some cases, refinancing might make sense If you can lower your rate or if you can refinance and pay off higher-interest debt.

In addition to this, another alternative would be to open a home equity line of credit (HELOC). This allows you to effectively use the equity in your home like a credit card.

This could mean paying unnecessary interest to use your home equity line of credit.

• Living Paycheck to Paycheck:

In June 2021, the U.S. household personal savings rate was 9.4% today it is now 3.50%.

Many households now live from paycheck to paycheck, and an unforeseen problem can easily become a disaster if you are unprepared.

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 especially when an economic recession hits. If this should happen, you will have very few options available to you.

Many financial planners will tell you to keep at least three months’ worth of expenses in an account where you can access it quickly.

Loss of employment or changes in the economy can drain your savings and place you in a cycle of debt continually paying for a debt.

A saved three-month buffer can make the difference between keeping or losing your house.

• Not Investing in Retirement:

If you do not have your money working for you in the markets or through other income-producing investments, you may never be able to stop working.

Making monthly contributions to designated retirement accounts is essential for a comfortable retirement.

It is important to take advantage of tax-deferred retirement accounts and/or your employer-sponsored plan.

Understanding the time your investments will have to grow and how much risk you can tolerate,

it would be wise to consult a qualified financial advisor to match this with your goals if possible.

• 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 financially have a tough time putting money aside to rebuild these accounts.

When the debt gets paid off, the urgency to pay it back usually goes away. It will be very tempting to continue spending at the same pace, which means you could go back into debt again.

If you are going to pay off debt with savings, you have to live like you still have a debt to pay to your retirement fund.

• 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. You need to know in what direction you are going and make spending some time planning your finances

a priority to steer yourself away from the dangers of overspending, and monitoring the little expenses that add up quickly.

After that, then you can move on to monitoring the big expenses. Think carefully before adding new debts to your list of payments,

and keep in mind that being able to make a payment isn’t the same as being able to afford the purchase.

Finally, make saving a portion of what you earn a monthly priority, along with spending time developing a sound financial plan.

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