It’s easy to develop bad habits with your finances, whether it’s overdoing it on your credit card or spending too much money on luxury products you don’t need. If you find yourself struggling to pay your car insurance or rent every month, why not take heed of our advice?
Bailing People Out
It’s not uncommon for people to lend money to their friends or relatives from time to time, but be careful if doing so. Unless you have confidence that the person you’re lending to will repay you quickly and in full, avoid lending out money if possible. Some people are flakey and will leave you at a loss. After all, if someone can’t budget and manage their own money, why should you come to their assistance just because you manage your money well? If you’re going to lend money and bail people out, be very strict about your repayments and do not hesitate to pester them for your money back – it’s your money!
Living Beyond Your Means
We live in a materialistic, consumerist culture, and as a result, many people live beyond their means and go broke in the process. Reports estimate that the average US household has $15,654 in credit card debt, and we’re willing to wager that most of the things bought with those credit cards weren’t bare-bones essentials. Do you really want a fancy new blender but can’t afford to buy it in full? Tough luck! Paying your rent and car insurance is more important than a fancy new toy which will be outdated or broken in a few years.
Some people simply don’t save their money; they have a mentality of “money is there, so I must spend it!” Living from paycheck to paycheck is inherently dangerous and anxiety-inducing – wouldn’t you rather have an emergency fund and safety net to fall back on in times of crisis? Sometimes if you’re trying to save but simply cannot afford it, you may have to look into getting a second job or upping your hours at your current job – the easiest way to put money away is to have more of it in the first place!
Failing to Budget
Even if you earn a decent amount of money, we all need to budget ourselves in order to maintain our lifestyles. You might put $100 away every week which is simply for disposable spending such as eating out and going to the movies, but you should still budget these things so that you don’t get ahead of yourself.
Buying Everything on Cards
Buying things on cards, whether credit or debit, can feel rather painless. Instead, many advisors recommend paying for things in cash wherever possible, as you “feel the burn” more and are likely to be more sensible. For example, if you’re looking to buy a new kitchen gadget for $150, you may be more reluctant if you’re handing over $150 in bills compared to pressing a few harmless buttons on a card machine.
Inadequate Retirement Planning
Planning your retirement is something which is best done with a professional who understands things such as inflation and government policies – planning for your retirement funds without any real financial knowledge is going to be disastrous. People tend to underestimate how much money they will need in their retirement, and most people don’t have the expertise in tax and estate planning necessary for a comfortable and safe retirement.
Are you struggling to budget and manage your money effectively? Our team is able to help! We can offer you bespoke advice on money management and hook you up with insurance deals which will save you a ton of cash!