Avoiding financial mistakes is a priority for many families across the globe and with good reason. Making common financial mistakes can set you back from your goals, not to mention, cause significant stress and anxiety in your life. However, being aware of common bad financial decisions and some of the worst money mistakes will set you up for staying on the right track money-wise.
This blog is going to investigate the top 10 common financial mistakes that people are making, again and again, to ensure that you don’t fall victim to any of these financial problems anytime soon.
Mistake #1: Having no Budget in Place
Budgeting is the biggest financial hack when it comes to staying organized and on track with what is coming in and coming out of your bank account. Creating financial stability is one of the main benefits of having a budget in place, and by not having one you are at risk of going off track, overspending, and leaving yourself short for a rainy day.
If you are someone who has not been budgeting up until now, give it a try! Check out these budgeting templates to set you up for economic success.
Mistake #2: Borrowing Too Much Money
We all know that having the ability to borrow money in a time of need is super handy, but it should be noted that borrowing beyond your capabilities to repay is risky and can lead to serious financial problems.
Mistake #3: Overusing a Credit Card
When learning about what not to do with your money, most financial professionals will advise avoiding ranking up lots of debt. Using a credit card for everyday expenses may seem tempting when times are tough, but this is a one-way fast track to finding yourself in dangerous territory. Using a credit card for all expenses is poor financial management and this habit should be stopped before it gets out of control.
Mistake #4: Too Much Frivolous Spending
We are all probably guilty of overdoing it by spending money on too many iced lattes or take away salads during lunch breaks, and although the money spent on items such as these may seem small, they all add up. A big financial mistake many make is engaging in too much carefree spending that eventually eats into money for bills and rent. Try to limit the amount of money spent on unnecessary items each week, here are some tips on how to improve your frivolous spending.
Mistake #5: Ignoring Saving Opportunities
There are many ways to save money on things like grocery shopping or essential home items through online discount websites and apps, like Ruby! Simply using our app can help you to save up to 40% on your shopping, which enables you to have more money for more important expenses like your mortgage or rent. Download Ruby today to start making mega savings, you won’t be disappointed!
Mistake #6: Paying for Unused Subscriptions
Have you got unused Netflix or Disney Plus accounts that could be costing you up to $200 a year!? If so, it’s time to cut any unused subscriptions that are chipping away at your bank account month by month.
Mistake #7: Not Saving
For many, saving money each month is a daunting task, but by not doing so, you are running the risk of driving yourself to real financial difficulty in the future. Getting into the habit of putting away the same amount of money each month will help you and your family to have extra money for emergencies or unforeseen events. Having stability in your financial situation will help you to avoid one of the most common financial mistakes.
Mistake #8: Buying Outside of Your Means
We all love the idea of rocking up to work on Monday morning in a new Rolls Royce, but unfortunately, for many of us, this is well outside of our means. Even if you don’t have your sights set on an extravagant car, buying something super expensive when you have a working, cheaper version can be an example of what not to do with your money.
Mistake #9: Not Keeping on Top of Bills and Payments
Letting bills and payments pile up is another really common financial mistake that many fall into. Avoiding this can be easy by adding reminders to your calendar, or setting aside an hour or two a month to map out when payments are due. That way, everything is paid off in time and you are at no risk of your credit score being impacted.
Mistake #10: Putting off Life Insurance
Thinking about life going on once you have passed is a horrible thought for anyone, but the truth is that it is something we all have to consider. Having a good life insurance package will help your family with expenses and will help them to avoid financial mistakes and bad decisions. You can learn more about the importance of life insurance here.
So, to conclude, these are some of the most common financial mistakes you should avoid when thinking about how to avoid poor money management and bad financial decisions. Putting some time aside each month to consider the above can aid you in seeing a significant increase in your financial situation and can get you on track to staying financially stable going forward.