Life is full of ups and downs with everyone making mistakes from time to time. More often than not, when mistakes occur, they occur regarding your finances. We all make small financial mistakes, and some of us make big ones too.
The issue with big financial errors is that they can have an adverse effect on your life. They can cause a whole lot or harm for you, and make things very difficult for years to come. Staying on this topic, I’ve decided to make a list of the worst financial mistakes you can make in life. The aim is that, by showing you these mistakes, you will know what to avoid and how to steer clear of them.
So, strap yourself in and enjoy reading about the worst financial mistakes you can make in life!
Abusing Your Credit Card
This next financial mistake is one of the easiest ones to make. Mainly, this is because the act of getting a credit card is actually one of the best financial decisions you can make. With a credit card, you have access to something that will help you build a good credit score. This is essential if you want to get the best mortgage loan possible when buying a house. If you have a good credit score, it shows you’re capable of handling credit very well. Mortgage lenders will see this and feel comfortable giving you a lot of money, rather than denying you the amount you applied for and making it hard for you to buy your dream home. Plus, credit cards can help you buy things when you might not have the money at hand now, but will in a week or two after payday.
So, having a credit card is important, but the biggest mistake is abusing it. Abusing your credit card means you max it out every month and don’t pay your bill in full. Consequently, you end up building a lot of credit card debt. Anyone that’s fallen into this trap will tell you it’s very hard to get out of, and very easy to fall into. The main problem comes when you spend all of your credit card allowance in one month but only pay the minimum payment. When you make the minimum payment, the rest of your bill for Month A gets added to your bill for Month B. Not only that, but interest rates kick in, which means your bill becomes more and more expensive. People continue to abuse their card and pay the minimum payment, leading to a huge mountain of debt.
To avoid this, you just have to be sensible. Be aware of your maximum credit amount and avoid spending too much. Make sure you can always pay off the monthly bill in full to avoid the high-interest rates. This stops you falling into debt and will strengthen your credit score as you prove you can pay back credit with ease.
Not Writing A Will
Not having a will is a huge financial mistake that you can’t afford to make. Too many people are at risk of making this error as they don’t think wills are that important. Or, more specifically, they don’t think there’s any point making a will when you’re young and in good health.
Well, not to put a damper on the mood or anything but everyone dies at some point. Furthermore, we can’t predict the future so have no idea what’s around the corner at any given time. I know it’s not nice to think about but you might leave the house one day and get into an accident, and that’s it.
When you have a will, you’ve got a document that enables your relatives and loved ones to take care of your estate. This means you leave instructions that tell everyone what you want to do with your money and any investments/assets, and where it will go when you die. Without a will, it may mean your loved ones receive less inheritance and the whole process of figuring out what to do with your money is more stressful for them. It could also mean the years of hard work you put into investing your money and building a fortune all come to nothing. If you haven’t said what you want to do with your assets it’s likely they won’t be put to any use and your money will be wasted.
So, you need to ensure you write a will and write it properly. You can’t just get a sheet of paper and start listing what you want to do with your estate. No, you’ll need to find a local trusted will writing service that can do things for you. They’ll listen to your demands and then write the will properly using all the correct legal terms to ensure it’s 100% legitimate. Now, you won’t have to worry about all your money and assets if the worst happens and you die suddenly. Your family are financially safe, and you’ll cause less stress.
Not Investing Your Money
It’s so important that you invest your money from a young age if you want to be financially stable in the future. Investments are a fantastic way of growing your wealth, while also saving money.
Instead of spending your cash on pointless and trivial things, you can put some of it into an investment and watch your wealth grow over time. Then, in a few decades time, you can sell your investment and have a lot more money than you started with. It’s like depositing money in a savings account only without the awful interest rates!
If you don’t invest, you’ll probably spend too much money, and you won’t be well set up for the future. So, don’t make this mistake! Look into investing at a young age and find things that can help you earn money over time.
There may only be three mistakes here, but they’re massive mistakes! If you want what’s best for your finances, avoid making these errors and say hello to a bright financial future.