There are lots of factors to take into consideration when managing money and setting yourself up for the future. The last thing you need is to have a poor credit rating that could affect you in later life. We have put together some money mistakes that you should always look to avoid.
Not Setting a Budget
You should monitor your incomings and outgoings – and have a clear understanding of what your affordability is. Only then, should you put an appropriate budget in place so you can get to grips with what you can spend on a monthly basis. There are some great budget apps and calculators that you can use, which will keep you on the right track.
Not Opening a Savings Account
Once you have set your budgets, then you will have a good idea as to whether or not there is money left over for savings. Make sure you have a savings account at the ready and set aside a certain amount to be put into it every month. Ensure that you do all necessary research into the banks and the types of saving accounts that are available to you before opening. Look for the highest interest possible and other added benefits.
Being Late with Payments
If you are late with a mortgage payment, or finance payment – this can leave a black mark and footprint on your credit rating. When this happens, it can make it difficult for you to get any loans, finance or even simple things like phone contracts if it gets to that stage. If you manage your budget effectively – you should have the adequate finances to make the payments, but it could just be disorganisation that causes the late payments. Set up direct debits or standing orders wherever possible to ensure this doesn’t happen.
Taking out a Car Loan Simply because it’s Been Approved
For many people it can be an attractive prospect to take out a car loan if your credit rating allows it. It could be that you can get a luxury car for less than you think, and that finance could be a better option. When you use the right company, the process can be so simple – and you can make manageable payments. With car loans – if they are secured you could potentially use your vehicle if you don’t make the payments on time.
Not Planning for the Future
We can all be a little guilty of not planning for the future and thinking that everything can wait – but you don’t want to be left in a difficult financial position when you are older. As such, as well as savings you should look at other options like company pensions, ISA’s, stocks and shares to keep your options open. Don’t take a chance and plan in advance.
Managing money can be a task that we all like to put off – but it can have a massive effect on your quality of life if not done properly. Make sure you don’t make these big mistakes!
To read more on topics like this, check out the finances category.