Every payday, we usually think on how we should spend our money. Some buys new clothes, shoes, gadgets and a lot more. But are we aware on how these expenses affect our savings and finances? Here are some financial mistakes that you probably didn’t know you’re committing:
1. Ignoring your debts
Do you think ignoring your debts make you stress-free? Not actually. It may be fun to fantasize about not paying back your debt, but it’s better to meet your obligation. Discover the effects of ignoring different varieties of debt. All of these cases have one common side effect – destruction of your credit rating. If you have shown a history of not paying back your debt, why would anyone lend money to you again? It will take years to rebuild your credit as defaulted debts and foreclosures stay on your report for years. During that time, you will find it hard to get credit and will pay significantly higher interest for any credit you do receive.
2. Not shopping smart
Everyone wants to save money when they shop. The best way to save money is to always plan ahead. You can save money and get the foods your family needs for good health, when you plan before you shop.
Before you shop:
- Think about some of the meals you will make.
- Look at what you have on hand.
- Write a list of what you need to buy.
At the store:
- Compare prices of different sizes and brands of the food you’re buying.
- Use coupons only for the things you usually buy.
- Try to buy just the amount you need or have space to store.
You may start to regret your actions, or question your buying decisions. You may feel guilty for chalking up bills and debts, or from having less money to spend on other necessary expenses. If you already own a lot of things at home, the added clutter from your recent purchases may be overwhelming too.
What’s more, the initial stressors which prompted you to hit the malls probably haven’t gone away. The stress will build up and multiply as you engage in more stress shopping because you have to deal with the guilt and remorse on top of the stressors you are feeling.
You can avoid stress shopping if you try other ways to relieve stress, such as exercising, practising mindfulness or spending time with your loved ones. Let shopping become an occasional perk-me-up activity and not an avenue to escape from your woes.
4. Absence of savings account
Once you have opened a savings account, one of the best ways to save some money is to automate your savings so you don’t have to remember to set aside money every time you get paid. There are many innovative and easy-to-use automated saving tools that can help you save automatically, and can make saving money almost as easy as spending it.
Moreover, there is a general agreement throughout the financial expert community that having a savings account will help to give you peace of mind since it enables a person to plan for whatever he/she desires to accomplish, purchase, or repair.
The next time you walk into your bank, ask them about their savings account options. It really is one of the best financial decisions that you can make for yourself and for your family.
5. Not sticking to your budget
Nobody likes talking about the dreaded “B word.” Just mention the word budgeting in a crowd, and you’ll see perfectly reasonable adults turn into petulant children. After giving you an angry stare, they’ll cross their arms, give you the side-eye, and breathe deeply until the moment passes.
Why? Because even responsible and hard-working adults hate the idea of budgeting or planning their spending. They work hard each week, they’ll say, and they don’t want to live life in a cage. And when you mention the fact that you budget, people can see it as a personal attack. If you’re budgeting, after all, that probably means you think they should be, too