We are all prone to the odd money mistake here and there. Forgetting to pay a bill, for example, or giving in to temptation when we know we can’t afford something. Provided we learn from these mistakes, we can put ourselves back on the road to financial recovery, but if we continue to make those same blunders, including the other mistakes within this article, we will be one step closer to financial misfortune.
Consider the following. If you’re guilty of making any of these mistakes, then now is the time to put things right. It may not be too late for you!
Mistake #1: You haven’t started an emergency fund
Aside from your savings, you should also have an emergency fund. This pot of money will safeguard you in the event of something disastrously going wrong in your life, such as when you find yourself unable to work, or have urgent repairs to take care of should something calamitous happen at home. If you don’t have the money to see you through, you may be forced to sell valuable items to raise funds or find yourself heading into debt by taking out a loan or a credit card to help you get by. If you haven’t started your emergency fund yet, start to put away some of your monthly savings towards this fund.
Mistake #2: You aren’t thinking about the future
If you are always living in the now, you probably haven’t even started a savings account yet, let alone an emergency fund. It is important you start putting money aside now, as this will serve you well once retirement rolls around or for when you want to spend your money on something other than your immediate needs, such as a holiday or new car. You should also think about trying to pay your mortgage off sooner, by upping your payments. There are also your children to consider, so you may want to leave a financial legacy for them. And on that note, it may be time that you made a will, no matter how old you are. There is a lot you can do now to ensure a better future for you and your family, so forget the living in the now mentality and start planning ahead to achieve financial security.
Mistake #3: You are unwilling to invest your money
It is possible to double and triple your monthly income by investing your money, but you might not want to take the risk. And this is reasonable; a bad investment can lead to financial troubles. But here’s the thing. If you never take a risk, you may never have the riches you have been dreaming of. It’s about finding ways to reduce those risks, such as setting yourself limits on what you spend when using a trading platform for stocks and shares, or researching the housing market when considering investing in real estate. It’s about reading articles online to give you guidance on ways to invest safely, and speaking to people in the know who may be able to give you some wise words of advice. Be careful by all means, but don’t rule out the possibility of making some kind of investment with your money.
Mistake #4: You are neglecting areas of insurance
It will never happen to you, right? Your home will never get burgled. The weather won’t bring your home to ruin. You will never have an accident. You aren’t going to die anytime soon. You are infallible, and nothing bad will ever happen to you. Therefore, why do you need insurance? It’s just another expense that you are never going to see the benefit of. Wrong! You’re not infallible, and you know it. If you have neglected to insure certain areas of your life, then perhaps you should start using price comparison sites to protect yourself. From home insurance to life insurance, you don’t want to be out of pocket if something goes wrong at home, or leave your family out of pocket if something terrible happens to you. You don’t need to pay for coverage that doesn’t apply to you but still consider your needs when shopping around.
Mistake #5: You are not dealing with your debts
Stop burying your head in the sand. Your debts are not going to go away until you deal with them. From credit cards to bank loans (including your mortgage), you need to find ways to pay them off and finally be debt free. By doing so, you will have more money to put into your emergency fund and savings account, and perhaps still have enough to splurge your cash once in a while without relying on your credit card to do so. Use this guide to help you eliminate your debt if this currently applies to you.
Finally
To better preserve your future, and the future of your family, you need to practice financial wisdom. By avoiding the mistakes we mentioned, you are one step closer to financial fortune and five steps away from financial misfortune.
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