Establishing a solid financial footing for you and your family can take time, sometimes years. Unfortunately, a single financial hardship or a temporary lapse in judgment can lead to years of hard work going down the drain.

8 Ways You Can Lose Control of Your Personal Finances

1. Living Without a Budget

Living without the boundaries of a budget makes it easier to spend money that you don’t have in the short-term, and it can also lead to financial hardships down the road. Living without a personal budget or spending plan is like driving down the street blindfolded. You think that you know the way, but there is a good chance that you will still crash, right? A budget lets you drive down the street with eyes open, leading to a more financially stable future.

2. Never Checking Your Credit Report

Checking your credit report only when you’re looking to apply for a new line of credit is a good way to be surprised when you get declined due to an error or even worse, fraud. you’re entitled to one free credit report a year from each of the three credit bureaus, so take advantage of it! At annualcreditreport.com, you can request a copy of all three of your reports.

3. Not Having an Emergency Fund

A new expense can happen upon us at any time. If you own a car, you know that maintenance usually comes at the most inopportune time. If you own a home, you know that repairs are inevitable as well. A loss of job, illness, and medical bills are all things that we don’t plan on, but they can happen. Having an emergency fund as part of your budget is a great way to help you through those times when something comes out of nowhere.

4. Carrying High Balances on Credit Cards

Having balances at or near your credit limit is a good way to lower your credit score and worse, lead you to financial ruin. Having these high balances can cause unneeded stress and increased money paid in finance charges.

5. Making Only Minimum Payments

Your financial situation can take a turn for the worse if you fall into this habit. Making only the minimum payments can lead to paying off credit card debt in thirty or more years and can cost thousands in interest. A high APR combined with a high balance can lead to minimum payments that may seem substantial, but be aware of how much of those payments go to the principal versus interest. It may shock you!

6. Making Late Payments or Skipping Them All Together

35% of your credit score is your payment history. Therefore, this very well could be the easiest way to ruin your credit score and your entire personal financial situation. The more your account goes past due, the more damage is done to your credit history. Most creditors won’t report your accounts past due until they’re more than thirty days late. After 30 days, banks and lenders will raise your interest rates very quickly after a few late payments, which could make the minimum payments double or triple.

7. Living Beyond Your Means

Attempting to keep up with the Jones? is one way to let your financial situation get out of control. Continuing to spend more than what you bring in will lead to credit card debt, lower credit scores, and financial hardships that can take years to recover from. Just like counting calories while on a diet, if you don’t maintain a balance, it’s impossible to reach your goal. Before you make a purchase, consult your budget and see if it can handle the extra expense. If you decide you want to add an expense to your budget, look for other places that you can cut back and save some money first.

8. Opening Many New Credit Cards

It can be tempting to open a new credit card at a department store to take advantage of a great deal or promotion, but resist the urge! Having too many credit cards, especially if they carry balances, can have a negative effect on your financial situation. Saving 5% on today’s purchase can cost you much more down the road.? Also, if you have 15 different credit card payments due at different dates every month, it can be very confusing and makes missing a payment or two more likely.

Avoiding these eight mistakes won’t guarantee that your credit score will be perfect or fix everything in your finances, but following a good budget and being aware of your financial situation can help guide you to a brighter financial future. Good luck!