Many people find themselves faced with debt at some point in there lives. Debt, decreased savings and increased expenditures are some of the elements that can seriously effect your finances. Avoiding these mistakes can make a huge difference in terms of financial security. We have created a list of 6 common financial mistakes to help you avoid getting in trouble.
1. Spending More Than You Earn
This is the number 1 factor to get under control with personal finance! How much you earn is irrelevant , if you live within your means, you can save money! Small items you buy here and there may not seem like a big deal at the time but they can have a huge impact over time. I recommend setting a manageable percentage of each paycheck to save each month and sticking to it.
2. Not Setting a Budget
A monthly budget should be calculated by considering all of your income & expenses! Make sure to include any funds you should be saving for the future. Once you are clear on what’s available to you then you know your budget for the month.
3. Not saving for Retirement
One of life’s biggest misunderstandings is the actual cost of retirement. Save as much as you can and start as early as possible!
4. Not Understanding the Importance of Credit Score’s
The credit score is a record of how you have handled your finances. A good credit score can make you eligible large savings in future when you make purchases like a house.To keep a good credit score you need to make sure you always pay your credit card bills on time.
5. Having Too Much Debt
Clear your debts as soon as you can! The burden of debt can have more of an impact than some people realize. It can lead to emotional problems like depression that can effect not only you but your family!
6. Overspending On A House
Buying a home is going to be your biggest investment. Many people end up investing all of their money buying a home that is beyond their budget. Expensive houses come with expensive bills which people often under calculate. What have your experiences been with financial mistakes?