Finance management is one of the things that we never learn from school; instead, we will have to explore with experience. There is no shortcut to becoming a pro in financial management. But there are some mistakes that can create a bad shape on your finances. What will happen if you know what these five mistakes are, and you can give a new turn to your financial future by simply avoiding them?
Most of us are more curious to learn how to manage money efficiently. The good news is you can simply avoid these 5 financial mistakes mentioned below to have better savings, good financial management habits, smart spending habits, and a secured financial future.
We share with you these 5 money mistakes that simply answer your query of how to manage money efficiently?
5 Money mistakes to avoid
#1. Avoid warehouse club-style shopping
One of the biggest mistakes to avoid is doing warehouse club-style shopping as you might end-up be buying things that you might not need at all. According to a study, if you’re among those who shop at the wholesale clubs such as Sam’s Club, Costco or BJs then, you would be spending and eating more.
Why should you avoid warehouse club-style shopping?
- Hefty annual membership costs
- The compulsion to buy everything in bulk (a few kinds of stuff get spoiled when kept beyond a period such as cheese, dairy products) You can’t buy everything in bulk.
- The temptation to impulse buying
- Before you go shopping, make a list of things to buy and stick to it
- Shop at local markets and grab the available coupons
- Look for a weekly discount at nearby supermarkets
#2. Avoid being blindfolded about your money
Do you have a track of every penny you spend and where all your money goes at the end of the month? If not, then it’s high time you stop being blindfolded about your money.
Knowledge is power!
One of the efficient ways to manage money is by talking about it. You can discuss your financial ups and downs with a group of like-minded people or your family and friends. This way, you can get new ideas on how other people tackle their problems or how to manage money in a better way. You can share your knowledge and learn from others on money management ideas.
#3. Avoid going for the easy payment options
Today, we all prefer a fast and easy process for everything so has retailers and payment systems have streamlined their process. With all the ease, you’re less likely to know how much you’re spending or over-spending. You need to know how much you pay for each item and if it is worth it. Every time you spend on an unnecessary thing, you’re losing what can be saved for the future.
Fix a budget for every week or month and keep the cash aside to spend.
#4. Avoid saving money on what is left at the end of the month
The ideal way to build your savings is by putting 10% of your income every month into your savings account. Saving should be your first thought and not what is left after spending.
- Add a category as “savings” in your monthly budget
- Fix an amount to save each month
- Switch to automatic transfer from checking to a savings account
#5. Avoid your credit to be misused by someone
You might be familiar with the Equifax data breach, where 145 million people’s personal and financial data was hacked. Before someone misuses your credit card, you can take preventive action.
Put a credit freeze on your credit reports. You can still use your existing credit, but no new lines of credit can be established. You might have to pay some amount to establish a credit freeze, and details are available on the Equifax website.
You would have understood how to manage money efficiently by simply avoiding these 5 money mistakes to have a financially secure future. However, the best results come only when you implement these at the earliest. Just knowing the hacks will not do good until you start applying those at your end. So, start evaluating your financial situation and review if you’re making or made these 5 money mistakes and how you can take counteraction to avoid it soon. It is important to know where you stand financially and track your progress every now and then. This will motivate you or even be a guide when you’re diverted from the path.