8 Mistakes You’re Making with Money

Do you find yourself counting down the days to payday, only to have your hard-earned cash disappear in a flurry of debt and debit orders? When it comes to money, we’re all making money mistakes that are stopping us from achieving the financial freedom we crave. Here are eight of the most common issues that many of us make:

  1. You don’t have a budget in place

If you’re not anticipating and tracking your spending against a budget every month, how can you tell where your money’s going? Keep monthly tabs on your income and expenses, and you’ll quickly spot the areas of your financial life that are problematic.

  • You’re not paying attention

Watch your finance fees closely. How much are you paying in bank charges? How much interest are you earning? Do you need to change the type of your account or even your bank to get the best deal?

  • You use expensive banking methods

These days, it’s usually cheaper (as well as safer and more convenient) to pay for something electronically, either with a card or online, than it is to withdraw cash from an ATM.

  • You deal with the wrong debts first

While it’s always a good idea to tackle any debt you have to your name, make sure you’re dealing with the debt that charges you the highest interest rate first. Credit cards and store cards are especially dangerous.

  • You often miss a payment, or pay the minimum due

Skipping your debt repayments is a slippery slope: you’ll only have more to pay next month and your interest will likely increase. Similarly, if you’re only paying the minimum amount due, you’ll be paying off interest long before you get to the actual money you owe.

  • You’re not prepared for sudden events

A burst tyre on the side of the road, a trip to the emergency room, unexpected dental bills: these things happen. Make sure you’re siphoning off a little bit of money every month into an emergency fund so that you can cover these unforeseen expenses.

  • You’re waiting to save

The time to start saving is now. It’s never too late and, no matter what you’re saving, it’s never too little. Put away as much as you can every month; you’ll be surprised how quickly it adds up.

  • You’re neglecting to plan for the future

While your retirement might feel like a long way off, it’s not something you can prepare for overnight. Make saving for your retirement a habit.

Unless you win the lotto, the chances of your financial life changing in one fell swoop are unlikely. Instead, reaching financial stability and prosperity is about making small decisions and sticking to them. Over time, they’re sure to make a big impact on your life.

Sources:

Smart About Money: https://www.smartaboutmoney.org/Topics/Spending-and-Borrowing/Control-Spending/Avoid-Common-Money-Mistakes

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