If there is one thing that many of us hope for in our lives, it is to be financially fit and well. Unfortunately, while this may be a great dream, it can be tricky to achieve, especially if we find ourselves making the same mistakes time and time again.
Do you want to avoid making those common money mistakes? Want to be financially fit and well? Check out our top guide to help you get back on track.
1. Not Understanding Or Approaching Taxes Properly
Taxes are a vital part of your finances, and it is one that you need to make sure you manage well. So not only do you want to try your best to be preparing your taxes as accurately as you can, but it would help if you also thought about how you can make your taxes work for you.
If you look online, there are several different tax benefits that you can apply to your claims. Knowing how best to make them work for you will help you make the most of the money you do have. A good bookkeeping professional can help you with this, especially if you run a business – so don’t be afraid to spend a little money to save money in the long run.
2. Spending Excessively
There will be things that you need to pay out for, but if you have found that your spending is on the rise, then it may be time to think about what you are buying. Excessive spending can be hard to stop, especially if you believe that every purchase you make is essential. However, the best way to try and prevent it is to keep track of what you are buying with a monthly budget. Then, every time you make a purchase, log it.
The first thing that this will do is show you where you are spending; the second thing is that it will help you stop and think about the purchase you have made before you commit to buying.
If you need help with a budget planner, check out my customizable budget planner here.
3. Forgetting About Those Never-Ending Payments
How often have you arranged a direct debit or regular payment only to forget what you are paying out for, or even that you have the charge in the first place? It might only be a small amount paid out every month, but that can soon build up and end up costing you a small fortune in the long run. So track down your monthly subscriptions and cancel the ones you don’t use or need.
4. Borrowing Money
There will be times when you have no other choice but to spend money on credit cards, but this shouldn’t be something you regularly do. Credit and borrowing money can end up having a much more significant impact on your financial situation. It might not seem it at the time, but all those payments and the interest builds up and could be even trickier to pay off.
5. Not Finding Ways To Save Money
Saving money is hard to do, but the good news for us all is that there are lots of ways that you can reduce how much you pay out on those everyday bills. It is essential to take your time to research this and learn more about the cost-cutting tools that you can use that will reduce your utilities and other things that you have to pay out for your household.
6. Living Paycheck To Paycheck
Do you find yourself waiting around for your paycheck to arrive? Are you struggling to make ends meet until your paycheck is finally deposited? If this is true for you, this may have a significant impact on your financial situation. Living paycheck to paycheck means that you won’t be able to save money month by month, which in the long term is not good news for you and your future.
If you live paycheck to paycheck, you are also more likely to rely on credit and borrow money, which will get you in even deeper trouble in the future.
Investing is the key to thinking about the future and how you will make the money that you have right now work for you in the future. Investments come in all shapes and sizes, which means that you will likely find one that will work best for you. If you are not sure where to start, speak to a qualified financial advisor who can help you to work out what is suitable for you in the present and what will work for you in the future.
7. Using Your Savings To Pay Off Debt
When you find yourself in debt, you spend money on interest and likely go farther and farther into debt each month. However, one of the worst things you can do is use your savings to pay off that debt. If you haven’t created a monthly budget, using your savings will only delay the pain of bad spending habits.
The first step is to fix your spending or income problem before you make any drastic money moves.
8. Not Planning
Planning is not exactly easy to do and is not always fun to think about where you will be in the future financially. However, one of the best things that you can do for yourself is to take the time to plan and think about where you may end up based on your current habits.
Sometimes planning is all you need to get your finances on track. It helps you to think about and assess where you are now and where you want to be. It can also help you to think about the ways that you can get yourself there too.
Of course, getting your finances in check is more than just following these tips for yourself. But, they can give you a push in the right direction. It will take effort from you, patience, professionalism, and understanding. However, by creating a monthly budget, saving up an emergency fund, and paying down your debt, you will finally take back control of your financial life and start living the debt-free life you deserve.