We’re all guilty of making financial mistakes from time to time. Be it a an impulse buy, a forgotten bill or a disappointing Friday brunch. But what’s important is addressing the bigger issues, before it’s too late.
By taking a few proactive steps, you can start managing your money in a more effective way, to protect your future and ensure you’re never left counting the cost of inefficiency.
Mistake No. 1: Stop spending
Not an easy concept to swallow – home to thrill seekers, shopaholics and the super rich. The old adage of ‘spend only when you need to spend’ seems entirely out of place in this part of the world. But never-the-less, a few adjustments can help – one less brunch per month, one less takeaway per week, one less staycation or trip to the mall. It all adds up to many thousands, all of which could be compounding towards your future retirement. It’s also worth planning your life around discounts, which are available online. To quote a famous super market, "every little helps".
Mistake No. 2: Stop living on credit
Who doesn’t have a wallet or purse full of credit cards? Used in the right way, you can boost your credit rating and enjoy a few rewards, so long as you stay below your limit and pay the balance every month. But of course that little piece of plastic has the power to make us think we’re rich, and we’re then left battling interest rates and credit card debts. If you can’t use your credit card wisely, don’t use it at all.
Mistake No. 3: No emergency fund or savings pot
Every once-in-a-while, it’s a good idea to take stock of your financial situation and ask yourself, if you lost your job tomorrow, could you cope? By building up a cash emergency fund of three to six months’ salary, you are effectively giving yourself a buffer zone to cover your bills should the worst happen, such as job termination or loss of earnings in the family. The beauty of an emergency fund is that you may also never need it. In which case, it’s a great way of building up your savings too.
Mistake No. 4: Not buying insurance, or buying too much
The power of insurance cannot be underestimated. By investing in the right products, you can ensure yourself and your loved ones will be financially secure in the event of job termination, illness or loss of life. With so many insurance options available, it’s important to seek regulated financial advice from a professional to ensure you choose the right cover for your circumstances, and equally you don’t over-insure yourself.
Mistake No. 5: Not investing
The best way to make more money from your existing money is by investing it in the market and paying into a retirement plan. If you don’t take advantage of compounding and make your money work harder for you, there’s a chance you might never be in a position to stop working.
Mistake No. 6: Not speaking to a professional
Don’t be afraid to seek financial advice. An adviser can assess your circumstances, help you to understand your options and make a detailed plan for the here-and-now and the future. Make sure you go through a licensed financial advisory. Your local financial authority will be able to tell you if your provider is regulated. It’s also a good idea to invest with an advisory firm that offers transparency upfront. For example, the Globaleye Valuation Service (GVS) is an innovative online tool which brings together all your finances and policies in one user-friendly dashboard, which you can access whenever you like, and wherever you are. It gives you up-to-the-minute information about how your investments are performing including all your other assets like property, cash, pensions and insurances.
To learn more about managing your money or if you’d like some free and confidential advice, get in touch.