There’s no avoiding the importance of cash. Have enough of it; then it’s seemingly all good; be struggling, and life looks a lot less bright. However, the most significant financial concerns aren't really about how much money we do or do not have: it’s the mistakes we make. Sometimes, these are mistakes of omission; sometimes we just mess up. Below, we take a some of the most serious financial errors that can have a significantly negative impact on your life. Take note, and you’ll reduce the chances of financial - or personal - obliteration.
Not Having Sufficient Savings
You never know what life is going to throw at you. If you’re working at a six-figure job, and you’re living a six-figure lifestyle, then you’re only one misstep away from seriously jeopardizing your personal life. It’s crucial that you’re putting enough money away each month to ensure a level of security should things turn sour. As a general rule, it’s good practice to have savings that equate to six months salary. That way, you’d have a safety net while you adjust to your new circumstances following termination.
Marrying the Wrong Person
We know that you should marry for life, but there’s also the real world that you need to keep in mind, too. For example, let’s say you’re earning six figures, but are happy to live a five-figure salary lifestyle to save money and retire early. You then marry someone who earns five figures but is happy to live a six-figure salary lifestyle. You’ll always be facing an uphill battle when it comes to your savings, and in truth will likely never reach them. Before putting a ring on a finger, make sure you’re on the same page when it comes to financial goals.
People do things that are out of character when they’re faced with a desperate situation. If you’re the owner of a struggling business, then it’s unlikely that you’ll just let your company fall by the wayside. But it’s imperative that you don’t do anything illegal. The temptation to commit fraud - which can be payroll fraud, or false invoicing - might be tempting. But if you need a deterrent, read up on ‘what does indicted mean’. You’ll be putting yourself in serious financial and legal jeopardy. If you’re struggling, find other ways to help your business, and stay on the right side of the law.
A house is our castle, and people want to have as big a castle as they can. However, remember that while a property is a good investment, it only works if you can manage the payments comfortably. Don’t stretch beyond your means to buy a bigger house; you’ll be much better served by a smaller, more affordable home.
Trying to Retire Too Young
Finally, a common mistake: trying to retire too early. Though you might want to enjoy a leisurely lifestyle, your career is the best moneymaker you have, and with retirement costing more than ever, it’s crucial that you only stop working when you’re completely sure you can afford to.