The Worst Financial Mistakes- And How To Avoid Them
Nearly everyone makes mistakes with money.
You can make a financial mistake simply by being young and uninformed, or later in life by not paying close attention.
Not a problem- it happens to everybody (or just about everybody).
But not all money regrets are made equal. It’s one thing spending a bit more than you should on a night out with friends or skipping a month of savings when you have a big occasion to pay for.
In-depth content, comment, meet peers: Join Conference Room
It’s quite another to not pay essential bills or rack up costly debt on a high interest credit card.
Contents
Avoid Snowballs
If you’ve made a financial mistake, don’t let it snowball. You can take steps to get out of any financial mess and improve your situation. The important thing is to recognize and accept responsibility for your mistake, and have a plan to get things back on track.
Here are some common financial messes, and you can correct them.
Take action to monitor your credit report, correct errors, and improve your credit score. Read this article to learn about recent changes in the credit scoring process.
Saving?
A lot of people say that they can’t afford to save, and live to the limits of their means or beyond.
In financial terms, not having any savings is a huge mistake. If you’re living from paycheck to paycheck, without putting anything away, it’s a big issue. It only takes a couple of life’s curveballs, like losing your job or an expensive car repair, to tip you over into debt.
The solution? Stop thinking of savings as a chore and reframe saving for what it really is – a cushion that can protect you from financial emergencies.
You need to adjust your lifestyle so that you aren’t spending every penny that comes in. Set up a direct debit to take money automatically from your account the day after you get paid, so you can’t run out of cash before you’ve put some in savings. Or, use a money management app that takes regular amounts for savings, plus rounds up all your card transactions and saves the remainder.
Find out more about business credit scores here: Get an Equifax Small Business Credit Report Today!
What About Bill Payment?
In life, there are negotiable expenses and non-negotiable ones, so if you get into a mess one month and don’t have enough to cover everything, make sure you prioritize.
Immediately cancel the non-essentials: things like subscriptions and large online orders. Next, make sure you do cover rent, utilities and taxes, especially if you’re self-employed. If not, you could find yourself in serious legal trouble and needing a specialist like NTC Tax Relief or damage your credit rating, making it harder to borrow money in the future.
Show Me The Money
Good money management comes down to the basics of creating a budget and sticking to it.
It’s surprising how many people drift through the month without keeping a track of what they are spending and how much money they have left. This can lead to serious problems if it carries on.
Find a monthly budget template online and fill out exactly what you have to spend. You may even want to transfer your disposable income – the amount you have left after essential costs – into a separate account, so that you only spend what you can afford.
Get into the habit of making a note on your phone of what you’re spending each day, and then it’s easy to see where you could cut back, if you need to create more savings.
You Got This!
Use these tips to get your finances back on track. You got this!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
Co-Founder: accountinged.com
(email) ken@stltest.net
(website and blog) https://www.accountingaccidentally.com/
(you tube channel) kenboydstl
Image:
Lottery tickets, Mark Ou
Day Two hundred and seven: It’s nice to dream sometimes
(CC By SA-2.0)