Making financial mistake applies to not just fresh-out-of-college graduates but also experienced folk. Everyone makes financial mistakes, but the key is to learn from them and make a change. An even better solution is to read further and understand what not to do when it comes to your finances.
1. The primary mistake that everyone commits is that they don’t have a financial plan that is well thought out. A plan takes into account all your expenses and all your sources of income and gives you a clear picture of where the extra money can be put into. Most people pay their monthly bills and expenses and then think about putting the money in a savings account. But a detailed plan will keep you in check when it comes to finances.
2. Another mistake that people make is that they just dream about their retirement plan, they don’t really make one. People often feel that they have time to make a retirement plan and tend to keep postponing it. But in all honesty, experts suggest that you should start saving and making investments from a young age. That way by the time you reach the ripe old age where you need to retire, you have a thoroughly planned retirement plan to fall back on.
3. Most people believe that they can save a lot of money by not using the services of a financial advisor. A financial advisor needs to be looked at as your coach while you’re the star quarterback. As good as you are without a proper game-plan, all your hard work can go to waste. So it is recommended to have sit downs with your financial advisor and review your plans. Seek the help of a financial advisor who knows what he is saying and not just anyone.
4. A huge mistake that people make is not to have an emergency fund. Always have money stashed away for the singular purpose of living on it for three to six months. The markets are uncertain, and companies downsize all the time. So it is good always to keep some money stored away to be used if and when you are unemployed. Do not rely on credit cards; credit card debt is a serious issue that arises from the very fact that people overindulge when they can’t afford to. So if at all you’re using your emergency fund during tough times then just stay away from credit cards till you get a constant flow of income again.