You cannot make these four mistakes

Often your financial success in your copper Money management style. How do you define your habits when it comes to spending, savings, investment and retirement planning?

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Money expert Suz Orman It is known about the common pitfalls that can endanger your personal resources. Its vision surpasses the basic principles of financial education and empowerment, with a focus on the vital role of understanding and managing debt, credit cards and spending habits.

Orman’s guidelines aim to direct individuals away from financial errors and towards the financial freedom. According to her, here are four money errors that you cannot make – and they are Very expensive to ignore it.

The accumulation of debt and mismanagement is major financial errors that you cannot really do, especially more than once. The debts link you and sweat your way to financial security. Orman emphasizes the importance of understanding your debts and seeking to eliminate it as quickly as possible.

Credit card debt is an essential example and a clear indication of financial troubles. If you cannot completely pay your monthly balance, you are already facing a financial challenge, especially if this debt comes at high interest rates. According to Urman, credit card debt indicates a deeper case of feeling less and spending more compensation.

She said at the end of the month: “You are already in trouble if you get a credit card bill at the end of the month and you cannot pay it completely,” she said at the end of the month. episode From its display. “You have to make your first goal out of credit card debts.”

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Another common mistake is to close credit cards after paying them, especially those who do not have annual fees. This affects your own CreditIt is vital to set interest rates and financial opportunities in the future. Maintaining a good FICO degree and a healthy credit report requires the ratio of debt reduction to credit and managing your credit cards wisely.

Orman said, “Fico wants about 720 or higher,” said Orman. “About 30 % to 35 % of Fico’s degree of something called debt reduction to credit, is the credit limit that you have on all these credit cards. Your goal is not to get more than 30 % of the maximum debt to credit because the low credit limit rate, the higher the Fico degree.”

Your credit fault misunderstanding can be an expensive error. These scores, which range from 300 to 850, play an important role in your financial health. The minimum with your credit record is that before you can start saving money or investing in your retirement accounts, you often need to return to the basics and improve your balance.

Go to school, they said. They said that you will get a better job for wages. Well, the past few years have been a group of high education for learners. The tables of confusing political business and the student loans payment options have not helped to explain how to move in a high -benefit debt cycle.

Student loans can also be particularly dangerous to your credit degree. Orman warns of assembling student loans more than you can manage and advise to focus on payment strategies that do not significantly add to the back interface of the loan.

This also speaks not to overeating in general. Borrowing can be more than you can tolerate education, especially for prestigious schools, a serious mistake. Orman suggests considering more education options at reasonable prices such as community colleges and confirms that your success depends on you, not the school you attend.

Signature loansEspecially for friends or loved ones, can be financially fraught with risks, and you may not fully understand the extent of its destruction to your money. If the basic borrower is backward, it may be severely damaged for you Credit and financial stability. Orman is recommended not to sign up to the subscriber unless you are ready to manage payments directly.

Regardless of the type of loan, you are on a hook for that, even if you trust this person. If they miss a car batch or bypass their credit cards spending, unfortunately, are you? This can be a damage to your short -term goals, such as building a file Emergency FundOr long -term goals such as savings for retirement.

Orman highlights the importance of understanding and managing different types of loans, including car loans and real estate loans. Maintaining debts under control is the key to obtaining financial authority and security.

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This article was originally appeared on Gobankingheshes.com: Suz Orman: You cannot make these four mistakes