Avoiding daily mishaps can help get money in order

Making a major financial mishap can often set a person's borrowing abilities way back. But it's often the small mistakes made daily that really put a dent in one's finances. A recent column by U.S. News & World Report highlighted some of the common mistakes as well as the perks of avoiding them. The first is investing in a mutual fund with expensive expense ratios. A 1 percent fee may not sound like a large deduction, according to the report, but can eventually add up to thousands of dollars. Many consumers do not give their credit cards and the scores they impact the attention they deserve. Making more than just the minimum payment on credit cards can help avoid the high interest rates that even low interest rate cards come with, according to the report. Reducing the balance on a credit card can also improve a person's overall credit, and make him or her look better to lenders. A strong credit score can put affordable interest rates on mortgage, auto and credit card loans within reach. Falling behind on payments or carrying big balances on credit cards can trim points off this score. One of the biggest mistakes consumers make, however, is neglecting to take a look at these scores. Scores can easily be obtained and reviewed for possible weaknesses. Many consumers believe that meeting their monthly obligations is the same as being able to afford them, according to the report. This is not the case, and can indicate a need to cut back on certain expenses. Separating their needs and wants is one way people may establish a budget. They should also look at their long-term obligations. Refinancing a mortgage isn't cheap, but sometimes the savings are worth it. "Reducing a mortgage by even 1 percent can result in substantial savings," the report said. "Whether because of falling mortgage rates, which are at historic lows, or an improved credit score, many may be able to save thousands of dollars over the life of their home loan by refinancing." Other places consumers should look toward for savings include their tax forms and the internet. Overlooking online deals and coupons often leads to overpaying at a store, while giving the government too much in the way of taxes can put a crunch on the funds available now.