If you haven’t started on your 2018 resolution of Money Saving Ideas, it’s not too late. More than 90% of the people fail to live up to their New Year resolutions. You can still get back on track with a few simple changes in your life.
Saving more money is not just about saving or earning more. Avoiding financial mistakes is another way of saving more money. In other words, stop the money from being spent on wrong things. Everyone makes a few financial mistakes. Some are big and some are small. The good news is, you can always turn things around.
This article will tell you about those common money mistakes that most people make and how you can avoid it to make more money:
1. Make saving your priority, not an afterthought
This is one of the most common mistakes that people make, especially by the people who are just starting. Saving money should be a top priority and not something you do as an afterthought. As soon as you get the next paycheck immediately transfer 10% to 20% of it in your saving account. You can automate it to avoid any temptation. This is a very effective way to save money. After you have deposited your money in the bank, you can proceed to deal with other things.
Within a few months, you will notice that you can get by just fine within your budget. You can survive without the things that you thought were so important like that five cups of coffee each day.
2. Not having a Financial Plan
If you are in your 20s and think life has just begun and there is plenty of time to save, then you couldn’t be more wrong. When it comes to a retirement plan, the earlier you start the better. If you start in your 20’s you will have saved a lot more money for your retirement than if you start in your 30’s.
Long-term financial planning is essential. You don’t have to save a huge amount. Just start small. You can start with an amount that won’t put much pressure on you. Once saving becomes a habit, everything else will come easy.
3. Make paying money A pain
It’s true that when you are actually aware of how much you are paying, you will be more considerate the next time. Paying in cash is one of the hardest ways to pay. Shopping online has become so much easier. With the auto deduction, you don’t even have to spend the time to look at it. This is where you make the biggest mistake. Be aware of where your money goes. Make paying a painful act so that you will remember the next time you spend money on something you don’t want.
4. Not Setting a budget
Even if you are living comfortably without any financial strain, you should still consider setting a budget. You can always put that extra money on an emergency fund. Setting a budget gives you the chance to spend wisely and not overspend.
Having a budget gives you a goal and plan to work towards. This also prepares you for those unexpected expenses. So, be a wise person and set a budget to manage your money better.
5. Not checking your credit score
This is one of the most common mistakes people make: not checking their credit score regularly. Use your credit wisely so that it remains protected and is in very good shape. Be aware of your credit card debts and what your credit score is. And make sure that you always remain on the safe side. The financial burden is one of the most depressing things that people have a hard time dealing with.
6. Not Building an emergency fund
Life is very unpredictable and you cannot rely just on your saving account for everything. An emergency fund will cover you against those unexpected expenses without hurting your retirement savings. The good thing about the emergency fund is you can slowly build them up. There is no pressure on how much you save as long as you put money towards it.
7. Spending too much money on unnecessary things
People can get carried away. If you live a laid-back life then it’s great. But don’t make it a lifelong habit. Sooner or later you will have to make some adjustments and stop spending money on unnecessary things. One of the best ways to keep a tab on your expenses is creating an excel sheet and list all your expenses. Once you have that, you will get a clear picture. People do take things seriously when they have the report in front of them. Stay in control of your finances so that you can live life more comfortable as you grow old.
These are the 7 mistakes you need to avoid to save more effectively for your future. Avoid these mistakes and your how to manage money problem will be solved sooner than you think.