Don’t Make These Money Mistakes!

None of us are born money-savvy. We all naturally make mistakes when it comes to our finances because rarely are we lucky enough to even have parents who know what they’re doing. Obviously, it’s healthy to make mistakes so we learn, but surely it would be better to bypass all that and get it right first time! Below are some of the worst financial mistakes you can make and how to avoid them – we’re just looking out for your piggy bank.

Not Living Within Your Means

Champagne! Shoes! Holidays! Of course, we’d all be happy if our luxuries were affordable, however, there is a culture of self-gratification that entirely ignores personal bank balances. Maybe we become jaded because we have so little compared to the millionaire celebrities we see splashed across the media and it’s hard to ignore the constant bombardment of irresistible advertisements. It’s time to get real though because there is nothing glamorous about debt.

Work out your monthly budget and stick to it. If you don’t feel like you have enough money to spend on yourself, try making savings in other departments by changing service providers for cheaper packages or selling the television. Failing to budget is another big no-no; nobody likes living from pay cheque to pay mistakes

Not Saving At All Times

Putting money aside is boring at the best of times, but we’ve all got to do it. Set yourself goals and treat savings like any other bill. If you can afford a £50 haircut every month, you can definitely afford to put that money aside in savings. Savings come before luxuries. You’ll thank yourself for it when you’ve got yourself a nice little nest egg.

Emergency saving funds are a must. Think of it as a little lifejacket for your fiscal health. Without 3-6 months of salary put aside, you can financially sink if you lose your job. Bad stuff happens to people when they least expect it and you need to be prepared for the worst.

Not Saving For Retirement

Fresh as a daisy in your early 20’s, you may think it is far too early to be thinking about your retirement. The earlier you start, the better off you are in the long term. Aim for 10-15% of your income in savings and keep it up so your sum can compound over time.

Taking Out A 30 Year Mortgage

If you can avoid it, don’t do it. The amount you pay in interest can be double the sum of a 15 year mortgage. Plus, you have the satisfaction of knowing the house is yours after a shorter period of time. Stemming those payments early can set you up for a more prosperous future that you can enjoy.

Using Credit Cards

Beware of getting yourself into debt. Instead, save up for big purchases and pay cash. Never take out a credit card: they so easily ensnare you into debt and it’s difficult to get yourself back on to your feet after that.

This guest article was written on behalf of IVA Expert (click here to visit website) by Francesca, a financial blogger who comes from the UK.

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