Money is something that plays on most people’s minds. Making ends meet, paying bills and putting a roof over your head can be stressful things to navigate – especially during a cost of living crisis.
You’ll be hoping to comfortably pay your bills, while putting money aside for exciting life plans such as getting married, going on a fun family getaway or buying a home.
However, money mistakes will only make this more difficult. If you’re unsure what these mistakes are, our article can help. So, whether you’re struggling to pay your bills or want to save for your first home, continue reading to learn more.
Living beyond your means
Living beyond your means is something you must avoid as going from paycheque to paycheque means you’ll have no savings and could risk bill payments not going through. Should this happen, you could lose your home or supply of gas and electricity.
Budgeting is a great way to overcome these financial issues and we recommend adopting the 50/30/20 rule. To do this, try to pay 50% of your wages towards rent and bills, 30% on everyday expenses, and 20% into a savings account.
Try to choose a high-interest savings account if possible as you can earn extra money each month as an extra incentive.
Neglecting emergency savings
You could be making a huge mistake if you don’t have emergency savings. Things can go wrong when you least expect them to such as a boiler or car breakdown, and unexpected bills can lead to financial worries.
It’s recommended that you build up an emergency savings that could sustain you for three months. This could then be used to cover you if you’re out of work or need to repair something.
Misusing credit cards
While these cards are a great way to build your credit score, they can also lead to financial strain. Excessive credit card usage can lead to debts that will need to be paid back with high-interest rates added to them.
If you do find yourself with these issues, consider a bad credit, debt consolidation loan to make it easier to manage.
Foregoing retirement planning
If you haven’t started your retirement planning, you could be missing out. Some of the main benefits of early retirement planning include:
- You’ll have more money when you retire
- Greater peace of mind that your future is financially stable
- You won’t need to depend on others for financial help once you retire
- You’ll take advantage of tax benefits
Ignoring financial education
Finally, failure to improve your financial education could lead to future mistakes. Try to stay informed about how to grow your wealth and protect it. Some of the easiest ways to improve your financial education include:
- Subscribing to relevant newsletters
- Listening to financial podcasts
- Reading finance books
- Talking to industry professionals