Money Mistakes You’re Probably Making
We all make mistakes. It is the only way we learn and make improvements. When it comes to money, the sooner you learn, the better. With that in mind, read on to discover some of the common money mistakes you could be making, as well as some great tips on how to rectify them.
Not having an emergency fund – There is only one place to begin, and this is with not having an emergency fund. If you are living day-by-day, an unexpected repair bill could easily throw you off track. After all, life is unpredictable. If you don’t have an emergency fund, now is a good time to get to grips with your incoming and outgoing money so you can put away a set amount every month.
Student loan repayment mistakes – There are many mistakes people make when it comes to paying off their student loans. The first mistake is prioritizing student loans over other debts. Student loans tend to have low interest rates and they don’t impact your credit rating. This is why you shouldn’t put them ahead of your other debts. The second mistake is with regards to student loan repayments. People don’t realize the wide number of options they have available to them. This includes student loan refinancing, consolidation and, of course, putting together your own budget and making savings that can go towards your loan. One thing you should never do, though, is borrow money to pay off your student loan.
Not knowing your credit score – It is important to know your credit score and understand how your credit rating works. This will enable you to improve and maintain your score so you are in a good position should you need to borrow money in the future.
Trying to buy a home before you are ready – If you try to buy a home before you are able to, you are going to struggle to achieve financial freedom. It seems that there has become a bit of an obsession with regards to millennials buying houses. We all assume that this is something we ‘need’ to do. However, buying a house is a massive investment. There is everything from the deposit to the on-going maintenance. You know what they say; don’t run before you can walk. There’s nothing wrong with renting.
Failing to discuss money with your partner – Money matters concern both you and your partner. Failing to talk about your money could mean that you are both on different pages. This could lead to big issues later down the line.
Failing to set up direct debits – Setting up direct debits for all of your payments comes highly recommended. If you don’t do this, you could easily miss a payment and this will show on your credit report for at least six years.
If you are making any of the mistakes that have been mentioned above, take the appropriate steps now to rectify them.