John Kim, the co-founder and co-chairman of Syncis, is a finance professional with decades of experience. He began his journey when he moved to the United States from South Korea and, since then, he has earned a positive reputation. Part of what John Kim does through Syncis involves teaching mid-income families the basics of personal finance. If you haven’t taken time to learn about personal finance, or even if you have, it can be easy to make mistakes and create economic hardship for yourself. The following mistakes are just some of many that you must avoid when managing your personal finances:
1. Unnecessary Spending – It’s easy to nickel and dime your money away without realizing where it goes. For example, your morning coffee before work might only cost $5 per workday, but that adds up to $25 per workweek and $1,300 per year. That $1,300 could be used to make extra car payments or to pay off a credit card. Even if you’re not struggling with your finances, spend a month watching where every dollar goes, and then eliminate your unnecessary spending.
2. Spending What You Don’t Have – The first rule of finance is to spend less than you make, and when you’re living on credit cards, you’re hurting your finances. Even if you carefully monitor your finances so that you spend less than you earn despite credit card use, and few do, you’re likely forgetting about interest. By the time you’ve paid back the gas, groceries and other credit card charges, the interest rate will increase the price of these items and cause you to spend more than you earn. Live within your means and quit making purchases with borrowed money.
3. Living Paycheck to Paycheck – Living paycheck to paycheck rarely leaves you with enough money to prepare for a rainy day. For most people, even a single missed paycheck would spell disaster and they spend all of what they make each month. Instead of completely depending on your paycheck each month, reduce your living expenses enough that you can put money in savings from every paycheck. Soon, you’ll have a cushion to fall back on if you lose your job or encounter unexpected expenses.
4. Needless Payments – When you examine where your money goes each month, you might notice that you make several monthly payments for various services. Music, a calorie counting program, video games, cell phones and cable are just a few examples of monthly payments that most people make. Consider what you would get rid of if money was truly tight and then, eliminate it. Even if you’re not strapped for cash, it’ll free up more money for savings.
John Kim hopes that, through Syncis, he can reform how the financial industry treats middle- and low-income families and, as a result, help these families better understand their finance situations. By educating yourself on the personal finance and managing your money carefully, you can take a small step toward that goal today.
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