Economic Advice

Five Classic Financial Mistakes To Avoid

Financial mistakes can be avoided with good planning

Financial mistakes can devastate the life of you and your loved ones. Unfortunately, there are some classic financial mistakes that I have seen repeated time after time by different acquaintances. So how to avoid financial mistakes? Being aware of the most common traps makes you less likely to fall into them. Over ambitious house buying: Buying a house is nearly always a great investment. But be cautious about what you can afford. When you are spending more than a third of your income on mortgage repayments this leaves too little money to deal with unexpected expenses. Under prioritising career development: Many of us see professional training and career coaching as a luxury or put it off for when we have more time. But in the long term this is possible the best investment you will ever make. Not negotiating prices: Some people find it embarrassing to haggle. But you are perfectly entitled to do this as part of any transaction and a surprising number of prices turn out to be flexible. If you turn this into a habit you will find that the savings over time can be considerable. Short Term Budgeting: If you plan financially on a month by month basis it is unlikely that you will take into account crises or unusual circumstances that create expenses. Therefore, you will be hit hard when, sooner or later, the inevitable happens. If you plan annually you will be more likely to take into account these possibilities. Debt aversion or addition. Taking on more debt than you can handle is a short cut to ruin. On the other hand, people who are averse to getting into any debt at all often do not advance much in life as they are unable to take advantage of opportunities.


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