Hard Target: Why are you making easily avoidable money mistakes?

No one ever argued that saving money was easy. Most of us just make it much harder than it needs to be.

Why is saving money so difficult?

Let’s start first by figuring out the easy part. Money mistakes that are easily avoidable center on not following a spending plan, something you’ve carefully crafted to take into consideration your income and expense and understanding that living below your means in paramount.

If you stick to that simple formula, chances are you won’t have much in the way of money problems. Furthermore, that same formula is going to do something that most of us can’t do well: save money and have an emergency fund.

The Catch 22 of the emergency fund links with running up high balances on credit cards. Something major happens, and you use the credit card or borrow money because you don’t have any saved. The reason you don’t have any saved is because you either don’t have a plan or you have one and don’t follow it.

Saving and managing money is difficult because we make it that way, mostly due to a need to satiate our wants and forget about our needs as being part of that aforementioned plan.

Those “wants,” things we convince ourselves we need and then spend money we don’t have on them translates into elements of money mismanagement that is highly avoidable.

First and foremost, you are taking those wants and turning them into credit card debt, running up balances on high interest cards and thus never truly getting out of debt. The more alarming fact beyond the average of $20,000 owed per household of unsecured (credit card) debt is that most of it can’t be related back to a specific, tangible item but rather things like taking a vacation or worse yet paying bills with credit cards or using an advance to put a down payment on a car.

Money also becomes difficult when you don’t understand the value of what you buy, and when you should spend wisely, underspend and, at times, spend a little more based on quality.

Buying a car that is brand new is overspending when a used one is going to have a lower payment and still plenty of repair free miles on it. You shouldn’t skimp on certain things, but those are few and far between, such as investing in your 401K as much as you can (overspending, in some ways).

Smart money managers also know how not to lose money on things they don’t need, such as overpriced utilities like cable television, warranties on almost all products or spending too much on insurance for your car or losing hundreds of dollars of year on bank fees.

Saving money is never going to be universally considered