Are You Making These Common Money Mistakes? - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Are You Making These Common Money Mistakes?

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Trying to clean up your financial act these days? Well, "Real Simple" Magazine is trying to make it real simple for you to avoid common money mistakes that start small, but end up being big headaches.

Small mistake #1: You overlook old library fines or parking tickets.

Big problem - many libraries and municipalities are turning these debts over to collection agencies that can put a dent into your credit rating.

Fix it! Take care of fines and tickets as soon as you know about them.

Small mistake #2: You carry even a small credit card balance.

Big problem - making minimum payments. It could take you 12 years to pay off $2200 on that card and cost you almost $2,000 in interest.

Fix it! Find ways to make larger monthly payments or try to get a loan at a lower interest rate.

Small mistake #3: You miss a mortgage payment or send it in late.

Big problem - experts say just one late payment can knock 100 points off your credit score, making other credit more expensive.

Fix it! If you can't make your mortgage payment, call your lender immediately. They should have programs to spread out the payment.

Small mistake #4: You wait too long to submit or check on an out-of-network insurance claim.

Big problem - you and your doctor could be stiffed by the insurance company and the doctor could demand the whole fee from you.

Fix it! Know your insurance companies timely filing limit. If you're late, contact a billing advocate for help.

Small mistake #5: You make a small claim on your homeowner's insurance.

Big problem - it could raise premiums or your coverage could be dropped.

Fix it! Before filing a claim, talk to your agent and make sure it's worth it!

Small mistake #6: You cash out your 401K when you leave your job

Big problem - the loss of substantial future earnings - potentially 10's of thousands of dollars.

Fix it. Roll over that 401K into your IRA, so money grows tax-deferred.

Small mistake #7: You don't pay a student loan while you're out of work.

Big problem - you accrue interest and fees, sometimes thousands of dollars worth.

Fix it! Inform loan provider you're out of work. By law they offer programs for those experiencing economic hardship.

Finally, check your credit report at least once a year. If you find a debt there that isn't yours, follow the credit-reporting agency's steps to dispute the charge.

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