Life is pretty much one long endurance test where you have to try and avoid as many pitfalls as possible, especially financially speaking. It is this game of trial and error, where you need to learn fast and rectify your mistakes as quickly as possible. The best way to do this, however, isn’t to learn from your own errors, it is to learn from other people’s, and that is where knowledge really does become power.
You see, there are five massive money mistakes that people seem to make on a regular basis, the kind that can really do their lifestyle some serious damage in the long run. To avoid falling to prey to these same errors, e have pointed the spotlight at them. Hopefully, knowledge will be your power on this occasion.
1. Don’t Save Money By Cancelling Health Insurance
It is one of those things where you look back over the last three years and realise you haven’t been to the hospital, doctors or emergency room once in that time, so why on earth are you paying all this money? Well, it is because there could be years in your life where you end up going to these places an awful lot and that is where it gets really expensive. In a game of risk, it just isn’t worth it. So, instead of cancelling your insurance, what you should do is lower the costs by switching to a high deductible insurance plan and put money away into a health savings account each month instead.
2. Don’t Rely on Your Credit Cards. Period
Once, twice or even thrice isn’t going to make this a problem, so much as you make sure you pay them off as soon as possible. What is a problem is making your credit card use a habit. That is a surefire way to be hit with a mountain of debt so fast you won’t be able to comprehend how it was even possible as you struggle to pay off the interest. The unexpected happens, but that is what an emergency fund is for, not a credit card. So, either stop using your credit cards - completely - which you can do by using this guide on thebalance.com, or make sure you have a system in place so that they are paid off each month.
3. Don’t Cut Corners On Legal Needs
The only thing more complicated than algebra is the law, so if you ever find yourself on the wrong side of it make sure you lawyer up, no matter the cost. Let’s say you get caught for driving without insurance simply because you forgot to renew your policy. It is in your interest to speak to a robertfriderplc.com type person and not try and go it alone and play the whole innocent-mistake card. The same goes for any illegal activity. The prosecutor is going to try and get everything they can out of you and they will use the law to do it. That is why you need to protect yourself with the law too.
4. Don’t Wait To Start Saving For Retirement
You need to be making regular payments into your retirement fund. Don’t wait until you have bought a home or finally got out of debt because by then it will be too late. Yes, the ideal amount to save is 15% of your paycheck, but you don’t need to achieve that straight away so long as you are putting something away each month. There is a thing called compound interest that can really work in your favour. Take advantage of it early on.