The Most Common Financial Mistakes

It’s easy to fritter away what you have with seemingly small expenses, even if you are quite well off. It may not seem excessive or costly when you buy that Costa coffee, stop for a pack of cigarettes, have dinner out or order that pay-per-view movie, but it all adds up. Just £25 per week spent on “extras” you £1,300 per year. This money could go a long way when used more sensibly. Perhaps towards an extra mortgage payment or a number of extra car payments. If you’re enduring financial hardship, avoiding this mistake really matters. This is when every penny counts even more.

The Most Common Financial Mistakes – Never-Ending Payments

We all have recurring payments coming out of our bank accounts each month. Perhaps though it is time to really look at what you are paying. Ask yourself if you really need items that keep you paying every month, year after year. Things like satellite television (or do you need that specific package?), music services or gym memberships. These can force you to pay eternally but leave you owning nothing. Creating a leaner lifestyle can go a long way to increasing your savings and reducing debts. Common financial mistakes can be eliminated with a bit of nous.

Surviving on Borrowed Money

Using credit cards to buy essentials has become somewhat normal. I started by buying one item, and then was on a slippery slop for years. It seemed like free money when it all started. Credit card interest rates make the price of the charged items a great deal more expensive. Depending on credit also makes it more likely that you’ll spend more than you earn. Spend money that you possess and nothing more. 

An Englishman’s home is his castle. We all appreciate where we live and want it to be as comfortable and pleasant as possible. That is normal and fair. But when it comes to buying a house, bigger is not necessarily better. Do not spend beyond your means for space you do not require.  What’s more, refinancing and taking cash out on it means giving away ownership to someone else. It also costs you thousands of pounds in interest and fees. You want to build equity on your house. 

Many households sadly live this way, and an unforeseen problem can easily become a disaster if you are not prepared. The result of overspending puts people into a precarious position. One in which they need every penny they earn and one missed paycheck would be disastrous. This is not the position you want to find yourself in when an economic recession hits. If this happens, you’ll have very few options. Financial planners will tell you to keep three months’ worth of expenses in an account where you can get to it quickly. Loss of a job or changes in the economy can drain your savings and place you in a cycle of debt. A three-month buffer could make all the difference between keeping or losing your property. Easier said than done for many of course.

Your financial future depends on what is going on right now. People spend countless hours watching TV but don’t set aside much less time to check their accounts. You need to know where you are going. Make spending some time planning your finances a priority. you’ll be wealthier for it, in more than one way.

Monitor the little expenses that add up quickly, then move on to monitoring the big expenses. Think carefully before adding new debts to your list of payments. , Being capable to make a payment isn’t the same as being able to afford the purchase. Finally, make saving some of what you earn a monthly priority, along with spending time developing a sound financial plan.