How to Avoid Five Common Money Mistakes
Learning to master the fine art of finance is a hugely important life skill. But it isn’t always easy. Forgetting to put money aside for an important bill, or falling in love with that designer dress can set you back hundreds of pounds and leave you scrimping until payday. So, what’s the solution? For starters, learning to identify those tricky finance traps before you get tangled up in them can make a huge difference. Here are some big ones to avoid.
Making unwise investments
We all like a little flutter now and then, but the difference between people who succeed and those who lose everything is simple common sense. Why are you placing a bet? Is it a conscious, well informed decision or is it an impulsive one? If you are serious about making extra cash, consider something more sophisticated than betting on a horse with a lucky sounding name. Do your research into other ways you can capitalise on lady luck. Spread betting, for example, has caught on in recent years because you don’t need to pay tax on your profits, or hefty commission fees. Look at resources like the tradefair spread betting website for more information.
Neglecting the sensible stuff
One of the easiest, most important ways you can safeguard yourself against those unexpected financial disasters is to have insurance. Yeah, OK, it’s not fun or glamorous to think about! But the truth is, you never know when you might need it. An accident on holiday, a stolen laptop, or even a pet that suddenly falls ill could set you back considerably if you forget to purchase insurance for the things you value most. With today’s comparison websites and competitive insurance rates, there really is no excuse.
Having an unrealistic view of money
Do you know someone who always splurges their money as soon as their pay cheque arrives each month? Or someone who owes hundreds on their credit card because they simply must have the latest pair of trainers? These people have an unhealthy relationship with money. Instead of seeing money as an entity to be managed carefully and thoughtfully, they see it as something that delivers a temporary high. Start to see your money as a precious resource and really respect the impact it can have on your life if you make the right decisions with it. Spend it mindfully, not impulsively. Your bank balance will thank you for it.
Forgetting to keep track
Too many people simply ignore what they spend on daily necessities, but they do add up. Here’s a sensible tip for anyone embarking on their journey to good finance, which everyone should try at some point. Over the course of a month, make a record of everything you spend, from your morning latte to your phone bill and everything in between. Once the month is up, take a good, long look at your spending habits. Whether it’s bank fees from ATM withdrawals, too many takeaways or even a mobile price plan that’s too high, you’re bound to spot some areas where you can make savings.
Not bothering to shop around
A surprisingly common mistake is spending on large items like holidays, cars and electrics without shopping around for a better price. Scouring the offers of different retailers sounds like a lot of work but it really isn’t. With so many price comparison websites to choose from, you don’t even have to leave your house! Your phone contract, your bank’s interest rates, even that handbag you’re lusting over are all items you can get bargains on, if you know where to look. Give it a try – you owe it to yourself and to your finances.
Now that you know these common mistakes, it’s time to get proactive about your finances. Good luck!
Photo Credit: Pictures of Money