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There are a few best practices that financial professionals recommend consumers follow — no matter their income or economic level — that can help build solid credit and a healthy financial profile from youth to retirement.

But for many Americans, these aren’t easy habits to make for any number of reasons including income level, expenses, a lack of financial knowledge or something else. Some people may not even be aware of the problem. But, no matter the situation, consumers may want to consider changing their habits to increase their financial freedom and plan for the future. If you’re one of those people, you’re not alone. Here are some of the major mistakes we’re talking about and how you can fix them.

1. Only Paying the Minimum Balance on Your Credit Card

Large credit card balances can negatively affect your credit and become a monthly financial burden. Experts recommend keeping your credit utilization (how much debt you carry vs. your total credit limit) below 30% — ideally less than 10%. Paying your balance off in full each month is of course the ideal, and yet many people simply pay the minimum amount every month. With interest, they end up paying far above the original cost of their purchases.

It may not always be possible to pay the full amount due, but it’s important to make your payment on time (another factor of your credit scores). If you’re working on paying off your credit cards, you can use this free credit card payoff calculator tool to find out how long that will take based on how much you pay each month. (You can see how your credit card debt and payment history are affecting your credit by viewing two of your free credit scores, updated every 14 days, on Credit.com.)

2. Spending More Than 30% of Your Income on Housing

Financial advisers recommend spending no more than 30% of your monthly income on housing costs (rent or mortgage payments). By keeping your rent or mortgage payments within that threshold, you’re more likely to have enough cash for expenses and savings.

But millions of Americans spend far more than that — with 11 million spending over half of their income on housing in 2014, according to a Harvard University report. To help avoid this from happening to you, you can use this tool to figure out how much house you can afford based on factors like your income, debts and other loans.

3. Not Sticking to a Budget

Planning a monthly budget is a fantastic way to limit unnecessary expenses — knowing what you can spend can help keep you from blowing through your paycheck. It may seem like a very basic concept — but it’s often ignored. A budget helps you understand what you can spend and can help keep you from making frivolous purchases. You can even have mini-budgets for shopping trips: Next time you have to go to your local grocery store or Target, have a budget and a list of necessary items, and stick to those guidelines.

4. Not Having an Emergency Savings

An emergency savings account is crucial to help cover unexpected expenses that could otherwise decimate your bank account and force you to take on debt. But despite the risks, 34% of Americans said they would have trouble coming up with $2,000 to cover a surprise expense. Home and auto repairs, medical expenses and job loss can all require immediate extra funds. When you’re working on your budget, it’s a good idea to factor in putting money aside for this emergency fund. One day when the fridge goes out or the car breaks down, you’ll be glad you did.

5. Putting Retirement Savings on the Back Burner

These days, retirement planning often falls to the worker. Once you have your budget set, and your emergency fund built up, experts recommend putting away 10% to 15% of your income starting in your 20s and increasing it at least one percentage point each year after that. But that doesn’t seem to be the trend everyone is following. Often, younger workers are deferring retirement savings plans until they are older, which drastically cuts down on the potential value of their retirement account and requires them to save more later to meet their retirement goals.

Also, many workers simply contribute the minimum amount chosen by their employer. Even with employer matching, this is more than likely not enough to provide for the future. No matter your career level, it’s a good idea to budget a way to contribute more than the bare minimum toward your future.

Image: Geber86

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