Financial decision-making is a skill that one improves over time, so don't be surprised if you make some of your biggest money mistakes while you're still young.
Being good at managing your money is an art that anyone can master.
It all comes down to adopting good money-saving habits that, over time, will (hopefully) turn into a good amount of savings in your bank account.
But to get there, you need to know what the most common money mistakes are and how to avoid them so you don't end up falling at the first hurdle.
Not having a monthly budget
This is a common monetary mistake that almost all of us have succumbed to at some point: living beyond your means.
Usually, it's the little luxuries we don't notice that put holes in our pockets, like that expensive gym membership, spending a lot on nights out, or unnecessary Uber rides. It is important to know what to spend and what not to spend on.
Misusing credit cards
Using your credit card as "free money" instead of spending just what you have is the perfect formula for financial ruin.
Treat your credit card the same way you would your debit card.
Thinking of getting that new iPhone? Think about whether you can pay for it directly out of pocket before assuming that you will be able to do it later.
Not having an emergency fund
An emergency fund is an absolute necessity. If you don't have one, you may have to resort to short-term solutions that you will regret in a few years.
We are not talking about a secret hideaway, Breaking Bad style. An emergency fund should be enough to help you if something unforeseen happens.
Forget to cancel subscriptions you don't use
Check if you are still paying any subscription for services that you no longer use.
Free trials are a great way to save money, but we've all been guilty of forgetting to unsubscribe from some obscure indie movie streaming service before the trial ends.
Not having insurance
If the coronavirus has taught us something, it is this: always take out insurance. Forever.
Buying insurance is a no-brainer, whether it's for your phone, health, your car, or even your home. Paying just a little bit each month could save you from a financial wreck down the road.
Staying loyal to expensive banks
Maintaining loyalty to banks and service providers should be a thing of the past.
Some banks offer great cash rewards and interest rates on savings for new customers, so it's definitely worth looking into if you think you could get a better deal with other providers.
If you can't get your money to work for you in the markets or through other income-generating investments, you will never be able to stop working. Making monthly contributions to designated retirement accounts is essential for a comfortable retirement. Understand how long your investments will have to grow and how much risk you can tolerate.
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