Living life for today is the only way to live right? No, that’s wrong. Spending everything you earn just so you can have what you want today is not the best way to live. Yes, you may have moments of happiness, but they’re short lived when you run out of money. The key is to stop making financial mistakes. That way your money can still help make you happy but in different ways.
Here we’ll look at the most common financial mistakes to avoid in 2024. And learn how to make your money work for you.
Table of Contents
1. Poor Planning and Budgeting
Do you know where your money goes? Or do you find you run out before your next pay comes in? If you don’t allocate every penny of your income towards an expense or savings, then you’re making a big mistake.
You’ve no doubt heard about how important it is to have a monthly budget , but you hear about it for a reason. When you know how much you’ve got to spend on something, once that money’s gone you stop buying it. For example, if you allocate £100 a week on food, plan how you’re going to spend that during the whole week. Don’t swap a meal for a takeaway one night if it means spending £20 over your budget. Be strict with yourself.
Having a monthly budget is only any good if you stick to it. If you’ve got spare cash, put it into savings or reduce your loans. Having this level of control over your spending will help you in the long run.
2. Living on Loans and Credit Card Debt
How much do you owe on short term loans, payday loans or credit cards? Has borrowing money become a way of life for you? If so, look to change this habit, it’s not good for you.
Whether you’ve got a good or bad credit score, there’s likely to be a company who’ll lend to you. The problem with this is that it gives you something to fall back on. It sends a message that you can have what you want, when you want it. But is the item you want to buy worth being in debt for? The more you owe, the more of your income you have to give up in repayments each month. This leaves you with less and less money to spend. Before you know it, you have so much going out in repayments that you’ve got to borrow just to make ends meet.
Borrowing money to pay for things does give you instant gratification, but it’s often short lived. When you have to save to pay for something, you appreciate it more.
3. Not Having An Emergency Fund
Life has a way of throwing unexpected expenses at us. They creep up at the worst of times and we have to find the money to pay for them. This often means borrowing the money, which can be at high interest rates. That’s why building up an emergency fund should be an essential part of your monthly budget.
If you’re spending all your money look for expenses that you can cut back on. Then set up a standing order to put this money into a savings account. It might feel hard to begin with, but you’ll be glad you’ve got an emergency fund there when you need it most.
4. Not Paying into Your Pension
It’s easy to live for today and think that tomorrow will take care of itself. But think how much nicer tomorrow will be knowing you’ve got money there waiting for you. A pension is safeguarding your future life, so you’ve greater choice in how you live in retirement.
The great thing about paying into a pension is that you can get extra money added to it for free. A lot of companies will contribute to a pension you pay into which helps top it up for you. Plus, you get tax relief on your pension payments.
With medical advances people are living longer, healthier lives. This means having a pension is the smart thing to do. Don’t make the mistake of thinking you’ve got plenty of time before you retire. The earlier you start paying into it, the longer it has to grow into a big pot of money for you.
There are always ways to reduce unnecessary spending. Track where you overspend, look at what you can go without. You can then start diverting your money into paying off debts or building up your savings. Being smart with your money will help you achieve your financial goals. Look after your money and your money will look after you.
Disclaimer: Please note, we are not providing financial advice. Our blogs are written for informational purposes only.