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Managing your personal finances can definitely be complicated. It requires planning and control to set and achieve your goals. Unfortunately, even when you put the effort in, you can sabotage this work without realising. We all make mistakes now and then, but those revolving around money can cause a lot of damage, resulting in both short term and long term problems for you and your family. With that in mind, here are six financial blunders that you can’t afford to make.
Paying For Unnecessary Things
Even the greatest of fortunes are often lost one pound coin at a time. Although it may not seem too big of a deal when you buy that fancy coffee each morning or rent a new film each weekend, these small expenses quickly add up. When you’re already struggling for money, cutting these costs from your budget can make a huge difference, freeing up cash for more important things.
Living On Borrowed Money
Using credit cards and personal loans to cover everyday essential purchases has become almost normal over the past few years. However, just because other people are willing to take on double-digit interest rates to pay for their food, it doesn’t mean that you should. If you ever couldn’t make the repayments, you’d find yourself in more debt, so it’s best to pay in cash.
Buying A New Car
Buying a brand new vehicle is never a good idea. Regardless of the make or model that you choose, it will begin to depreciate from the moment you drive it away. This is why you should instead opt for a used car, from a dealership, like Suttons. By purchasing a vehicle this way, you’ll limit depreciation, as well as make big savings on your car insurance each month.
Relying On One Income
These days, you should not be relying on one income alone. Instead, you need to have two and sometimes even three. This means that, if anything went wrong with one of your jobs or investments, you’d always have another to fall back on. If you don’t fancy working evenings or weekends, then start your own blog or turn one of your hobbies into a side hustle instead.
Ignoring Your Partner’s Spending
When you get married or even just move in with one another, your partner’s money habits will begin to affect your finances. This is the case whether you share a joint account or not. Because of this, you must ensure that you and your other half are on the same page when it comes to spending. If you have different views, you should try to find a middle ground together.
Having No Emergency Fund
It doesn’t matter how well you take care of your finances; there is always the chance that something will go wrong, leaving you with an unexpected expense. This is why it’s so crucial that you build an emergency fund. When you have savings stashed away somewhere, you don’t need to put yourself into debt when emergencies occur.
To take care of your finances, avoid the mistakes listed above.