Money is a complicated affair. That is why it is inevitable in life to make a few money mistakes along the way. Some money mistakes, however, can cost us our financial freedom. Here are our Top 10 Money Mistakes to beware of or put a stop to as soon as possible
Money Mistakes # 1: Not saving for retirement from an early age
Saving for retirement should be a monthly deduction as early as your very first paycheck. This way you gradually get used to this saving without it really placing strain on your budget. Only starting later in life places a lot of pressure on your monthly budget at a time when you have other expensive financial obligations too. Start as early as possible and make sure you are contributing enough.
Money Mistakes # 2: Not saving for your children education while they are young
By the time your children need to go off to college, your retirement savings will also be at their highest. Saving for your children’s education should be something you contribute to way in advance so you don’t have to dig into your retirement savings. Create an account in each child’s name as early as possible and save a doable amount every month.
Money Mistakes # 3: Not living on a strict budget
Aimlessly swiping cheque and credit cards and not really knowing what your bank status is pose two risks: 1. Overspending 2. Zero savings. Creating and sticking to a strict budget allows you to better manage your expenses, savings and debt repayments.
Money Mistakes # 4: Taking on credit without really grasping how it works
A person’s first credit or clothing account card is almost a right of passage. Some of us are so excited about it we don’t read or fully grasp the fine print before swiping away. It only really dawns on us what interest means when we feel it in our pockets. Before taking on any credit it is essential to comprehend exactly how much the interest is monthly and what it translates into actual figures.
Money Mistakes # 5: Not having a debt repayment plan in place
Unattended debt has a way of sneaking up on you. Every month the installments become just a little harder and harder to bear, until one day you realise you have to start funding debt with debt. Make a plan to tackle your debt before it dictates your every move.
Money Mistakes # 6: Not saving towards an Emergency Fund
Emergencies and unforeseen costs are the things that send us reaching for our credit cards. You might be able to recover from the debt you made to service your car one month, but sometimes, unforeseen costs can rack up an exorbitant bill. With an emergency fund in place you won’t need to make debt should life get in the way.
Money Mistakes # 7: Not staying on top of fees
Nobody likes going through bank, phone and other statements with a fine toothcomb, but unfortunately it is necessary. In doing so you can double check fees to look for any irregularities and also stay on what things really cost so as to cut fees going forward.
Money Mistakes # 8: Not taking out disability cover, life insurance etc.
The thought of experiencing a devastating accident or falling ill with cancer etc. is not something any of us would like to see in our futures. However, by taking out sufficient cover you will be able to protect your loved ones and yourself from financial burden, just in case.
Money Mistakes # 9: Spending more than you earn
By constantly spending more than you earn you not only accrue more and more debt each month, but you also won’t be able to save. It is a slippery slope where even an annual salary increase might not rectify the situation. That is why having a budget, and relentlessly sticking to it, is essential.
Money Mistakes # 10: Living for instant gratification
There is a fine line between needing and wanting something. It is often one of the hardest lessons consumers have to learn. There is a time and place to splurge on something. However, if it becomes a mistake you often make it could prevent you from accomplishing bigger and better financial goals by learning to hold out and save.
If you have made so many money mistakes and find yourself deep in debt, with no way out – contact Debt Rescue. We are here for you!