Ever wonder where your money goes after payday? Falling off the wagon of managing your money well can happen easier and faster than you think is possible. And we’re not just talking about habits like splurging on luxury items. Giving away too much money to others before you pay for your expenses is an example of a money mistake that can put you at a disadvantage. Here are five money mistakes you must avoid for a better financial future.
1. Not having an emergency fund
Life happens; things like an unexpected job loss or a car breakdown can set you back severely. You may have to either borrow from others or from a financial institution or sacrifice money from your other monthly expenses to cover the emergency. This leaves you with the repayment of the money you borrowed on top of your monthly expenses.
2. Standing surety for a loan
By agreeing to stand surety for a loan, you are committing yourself to pay the loan off if the party taking it is not able to make the repayments. A good way to see if you can afford to stand surety on a loan is to determine if you would be able to cover your normal expenses and make the loan repayment if the party taking out the loan was unable to.
3. Mindless spending
Pay attention to how and when you spend money. Once you have identified the pitfalls, it will be easier to put plans into place to manage your likelihood of mindless spending. Try this:
- Never shop on an empty stomach
- Always take a shopping list to avoid buying things you don’t need
- Take advantage of your discounts and rewards
4. Getting married or starting a family without a financial plan
It is not a good idea to go into as something as life-altering as marriage or having a child without a financial plan, unless if you have a money tree at home. Such changes come with their expenses and require proper planning for the future. Find a financial adviser near you right now to chat about your financial future.
5. Always buying the cheap things
Buying the cheaper version of everything can cost you more money in the long run than saving up for the more expensive, better quality version in the first place. Often, better quality items last longer than their cheaper counterparts that you may have to replace regularly –costing you more money.
You might also want to read this post: Money mistakes to avoid