Have you ever made a financial mistake that affected your credit, caused stress, and a lot of grief? (I know I have.) The good news is that because it's human nature to make mistakes, there are ways to avoid making these mistakes in the first place.
Everyone makes mistakes, but some of the biggest financial mistakes are made by people who don't even realize they are making them. Whether you are saving for years to buy a home or just trying to keep your head above water while paying off loans and credit card debt, there is no reason why you should be making these three common financial mistakes:
Not having a goal
First, you need to set a goal. Without that, your finances are like a ship with no rudder or compass.
You can have short-term, mid-term, and long-term goals—it's up to you.
The important thing is that they are realistic and measurable because this will help keep you accountable for reaching them.
Let's assume one of your financial goals is to pay off all your debt by the end of 2023. This should show the exact amount of time and how much money it will take.
This is better than saying "I'm going to be debt-free" without giving any specifics about how much debt there actually is or when exactly it needs to be paid off. This makes it easier to figure out what kind of budgeting strategy you need to reach that goal on time without missing any payments along the way!
Not prioritizing your savings
Saving for the future is important, so you should have a savings strategy in place. How much you need to save depends on your goals—whether that's saving for a house, retirement, or a car.
The sooner you start saving and investing, the more time your money has to grow.
You need to focus on your savings before you start spending them on things like vacations and eating out at restaurants. These things can wait until later down the track when life isn't as financially stressful (or if they are really important). But don't forget about yourself! Make sure that some of what's left over after paying bills goes towards fun activities like going out with friends or taking up a new hobby like yoga classes or swimming lessons.
Just make sure it doesn't become too much of an expense!
If setting aside money for long-term financial goals isn't something that comes naturally, then here are some tips:
Thinking short-term
It is tempting to think that you will be able to save for your future later.
But once you hit your 40s and 50s and realize how much time has passed, the thought of retirement may feel like a pipe dream. Take a step back from the day-to-day routine and consider how you can use your savings most effectively.
If you want to retire early or just be financially secure in general, it is wise to start thinking about saving for retirement in your 20s or 30s.
However, if saving isn't something that has piqued your interest yet, don't worry! Just imagine: how will things look when you reach age 65? What kind of life do you picture yourself having? Do whatever it takes to set goals so that they are achievable with both short-term and long-term plans in mind.
By doing this now instead of later on down the road when there are fewer options, it becomes easier.
Financial planning is important for a healthy financial future.
Financial planning is an important part of your financial health. It is not something you can do overnight, or from one day to the next. It requires discipline, and honesty with yourself about your goals, abilities, and resources.
If you want to get on the right track for financial health in the long term, then here are some tips for how to start a plan that will help you achieve your goals:
Money Saving Tips
Many of us think that saving any money whilst on a low salary is impossible right? Wrong. The majority of our population is earning just about enough to live on, so how can they save money or plan for the future?
Saving money is not easy and unfortunately, not everyone will be able to. We have done some research and put together some tips to help those on low income put some money away.
•Create a monthly income-outgoings budget spreadsheet and track every amount
•Rent a part of your house out. If you are willing to lose some privacy then a tenant or house share may free up some money and help contribute towards rent payment.
•Buy everything second hand. This does not only apply to your car but also your household furniture, toys and even clothes.
•Avoid going into debt. Just because someone else has something, it doesn’t mean you have to go into debt to have it too. Borrowing money can be tricky as you have to be certain you will be able to pay back when due. Also, if there is interest attached to it, it may present more of a challenge than anticipated. Make sure you calculate and be upfront about when you can pay back a loan to your lender. As a rule of thumb - borrow only as a last resort.
•If you have the time, why not get a 2nd job? It can be something for a few hours that does not affect your full-time day job. Though time-consuming, it presents the advantage of another stream of income.
•Prepare homemade lunch for yourself and your family. This way you know you will have good food at the fraction of the cost.
•Entertain yourself. Rather than going out to watch a film at the cinema, why not try something for free but as much fun? Try going on walks, cycling or catching up on a good book – these are healthier and can be cheaper too.
•When shopping, make a list at home and stick to it. Avoid shopping for “wants” and just stick to “needs.”
•Set yourself savings targets. Having something to aim for will keep you disciplined in managing your spending.
•Please remember that individual and family needs are different, so plan carefully and try to stick to it. Unfortunately no one can plan for unforeseen emergencies, but we can prepare for such things.