5 Common Financial Mistakes to Avoid

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Some of us must have made one or two money mistakes over the years, learned our lessons and adjusted. Well, for those who haven’t made any mistake and those who are always falling into financial issues, there are measures you can take to considerably help your finances.

According to slice.ca, here are common money mistakes you can avoid:

1. Not saving

The fear of missing out is more popular than delayed gratification, which can lead to overspending. Unfortunately, that’s one reason why people are carrying so much debt. A spending mentality has to turn into a saving mentality.

To make saving easier, automatically transfer a percentage of your paycheque directly into a savings account. Better yet, consider putting the money into an account or any other available means that can help reduce the temptation to dip into your savings.

2. Having credit card debt

Consider the amount of interest you have to pay when you have debt. Sometimes it’s necessary to go into debt—to buy a house or pay for a degree, for example—but mortgages and education loans offer much lower interest rates than credit cards, where rates may be as high as 20% to 30% annually.

If you do have credit card debt, pay more than the minimum payment each month. You’ll save a bunch in interest and late fees, and keep your credit score healthy, which can make it a lot easier to get an apartment or a lower mortgage rate.

3. Not properly budgeting

It’s easy to go astray when setting a budget, whether that’s forgetting to pay a bill or freaking out when you blow past your December limit because you forgot you had to make a certain purchase. So before you commit to a budget, spend a month noting where your money goes. Then, when drafting your spending plan, you’ll have exact figures to work with and won’t be setting yourself up for failure. Allow for some wiggle room for both emergencies and enjoyment, so one unexpected cavity or night out doesn’t send your budget tumbling down. And create a new budget at the start of each month to account for busy birthday months or other financial ebbs and flows in your life.

4. Not shopping around for financial products

There’s usually a better deal out there. Whether it’s a credit card with better rewards, a lower home insurance premium, or a no-fee chequing account, you’re throwing money away if you don’t look for alternatives. You can also let your current provider know you’re checking out the competition, and see if they’ll incentivize you to stay.

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