Writing about personal finance for a living means I always have money on my mind. Unfortunately, this doesn’t mean I always make the right choices regarding money matters.
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I have an MBA, I frequently cover new financial products and regularly interview experts on different ways to save money. Arguably, I might know a bit more about making smart money moves than the average person, but my husband and I still had our fair share of blunders in 2023.
If you’re feeling a bit guilty about some of the less-than-ideal money moves you made last year, you’re not alone. Here’s a look at the worst money mistakes I made in 2023.
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1. Failing to Max Out My Roth IRA
I had big plans to max out my Roth IRA last year, but I didn’t quite make it. In 2023, the limit was $6,500 — or $7,500 if you’re 50 or older by the end of the year — which breaks down to about $542 per month.
To be honest, I actually haven’t given up on this yet. The IRS allows you to make contributions toward the previous year’s limit until your tax return filing deadline.
I’m currently still contributing toward the 2023 limit, and I plan to do so until I reach the $6,500 limit or tax day arrives — hoping for the former. Of course, this means I’ll get a late start on 2024 savings, which saw an increase on the limit for annual contributions to $7,000 in 2024.
I will divide $7,000 by the number of months left in the year when I shift my savings to 2024 contributions, so I know exactly how much I should be saving per month. Hopefully, I’ll be able to put this amount aside, so I won’t be in the same position next year at this time.
2. Overspending on Black Friday
I love a good sale. However, I may have taken this a bit too far this Black Friday weekend.
Far from just holiday shopping, my husband and I found deals on many of our regular expenses. This included gift card bonuses at our favorite restaurants, a discount for renewing our membership to our local children’s museum and sales on winter apparel for our fast-growing kids — and of course, ourselves.
While we definitely saved a ton of money, we didn’t budget for so much November spending. Our credit card bill wasn’t pretty, which is never a great position to be in.
I still think this was a good savings strategy, but we need to plan ahead for it this year. Mapping out what we might spend in advance and having money set aside for it is a must.
3. Spending Too Much at the Supermarket
Like many people, my husband and I ordered too much takeout during COVID times, and this habit extended through 2022. Last year, we vowed to do better, which we did.
However, we weren’t that great at budgeting at the grocery store. Simply cooking at home doesn’t mean you’re saving money, which we soon realized. Of course, lots of things are expensive these days. Between the two of us, we were definitely making a handful of trips to the store per week, which added up fast.
This year, we’re already working on making a conscious effort to think about the cost of recipes before we decide to make them. If we want to make something with pricier ingredients, we’ll plan to mix in cheaper recipes before and after to even things out.
4. Putting Aside Too Little in Savings
I love saving money, but as I assume many others can relate, it isn’t easy. Despite our best intentions, there wasn’t much left at the end of most months.
We really want to get back into a pattern of saving a set amount each month. However, it seems like there’s always a steady stream of expenses standing in our way.
Clearly, we need to set a budget, then determine a set amount to have automatically sent to savings each month. We know we need to do this and hope to get started on it soon.
5. Not Taking a Closer Look at Annuities
I know annuities can be a great investment, and I regret that I’ve never seriously considered purchasing one. If you’re not familiar, an annuity is an insurance contract issued and distributed by a financial institution that provides a guaranteed income stream.
These are often purchased by retirees, but given the high rates of return currently offered by some financial institutions, I think it could be a great investment for anyone.
For example, Gainbridge’s FastBreak Annuity offers a 5.80% APY*, which is a higher rate than most banks. This rate is actually locked in, as opposed to the variable APY attached to savings accounts.
You invest a lump sum for a set term — typically three to 10 years — and in return, you earn interest at a fixed rate, i.e., a guaranteed interest rate period. There’s no risk involved, as your money can’t be lost unless you withdraw funds or surrender the annuity prior to the end of the investment term.
This is a great deal, as it’s a no-risk investment with a locked-in above average APY. I’ll definitely look into this more in 2024.
6. Going With the First Quote for a Major Home Repair
Our air conditioner broke during a summer heatwave. To make matters worse, it happened on a weekend, right before the Fourth of July.
In a panic, I found the only company that would come to look at it the next day. They rigged a temporary repair, but the entire HVAC unit needed to be replaced.
Getting quotes for a new HVAC unit is pretty time consuming, so we opted against shopping around. In hindsight, this was a bad move that I’m pretty sure cost us several thousand extra.
From now on, we’ll get at least one other quote — if not more — when embarking on an expensive home repair.
*Annuity rates are subject to change at any time, and the rate mentioned may no longer be current. Please visit Gainbridge.io for current rates, full product disclosures and disclaimer. Withdrawals above the 10% free withdrawal amount subject to a withdrawal charge and market-value adjustment. FastBreak
is issued by Gainbridge Life Insurance Company in Zionsville, Indiana. FastBreak is not a tax-deferred annuity; instead, it is taxed annually.
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This article originally appeared on GOBankingRates.com: I’m a Personal Finance Writer: These Are the Worst Money Mistakes I Made in 2023
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