One of the biggest problems of the current educational system is that it doesn’t teach you anything about managing money or debt. It is one reason we keep falling for marketing gimmicks and even Ponzi schemes. Credit card debts become our biggest headaches and we fail to understand whether current gratification is better than future security.
Here is a list of financial mistakes that you could be making and how to avoid them.
Eating out like there is no tomorrow
YOLO or You Only Live Once is a good philosophy when it comes to enjoying life and living in the moment. However, when YOLO becomes the motto of all your expenses, you make a serious mistake. You don’t have to chug mugs after mugs of beer at a pub every weekend, nor do you have to eat out consistently. Those weekend parties and buying lunch daily is doing nothing good for your wallet or your health.
To make sure you don’t make this mistake and convert it into a lifetime of bad habits, learn to enjoy life without spending money. Drink beer, but occasionally. Eat out, but not ritually. Go on vacations, but not just to escape reality or gain acceptance among your peer by posting dozens of pictures. There is a lot that can be achieved by living a simpler life.
Using credit cards for every payment
If you are paying for groceries and other daily expenses using a card, you are essentially digging your own financial grave. Of course, you will get several rewards for using plastic money and it is very convenient to swipe a card instead of counting money. However, every pound you spend using a card comes with an interest. It keeps piling up over time and lands you in a debt trap that you are unable to get out of.
The easy way out of this situation is to follow a simple rule- never use more than 30% of your card’s limit. When you do this, you can pay off the card in full every month and still have some credit available to get cash or pay for an emergency. If you don’t have anything, you must visit https://www.luckyloans.co.uk/ immediately and get a short term advance.
Not having any savings
Zero savings is counted as a financial sin. If you do not have anything in your saving bank account, your emergency fund, and your retirement fund, you are living a lifestyle that could be swept from beneath your feet in an instance. To avoid any unpleasant circumstances, it will be better to save at least 10% of your income every month. A genius move would be to live at least 30% below your means and save the rest.
Create low fee and high interest paying accounts for saving your money and see how it grows with the magic of compounding. The more money you have in the bank account and the longer you keep it there, the better the effects of compounding.
Do you think you can get over these mistakes and create wealth and a big bank balance in the next one year? If yes, get ready and take charge of your life today.