Financial literacy has definitely been on the rise in recent years, and the internet takes a lot of the credit for that, but there are still so many simple financial mistakes that we make on a regular basis. Find out more about the problematic issues we cause for ourselves and the reasons why we keep making the same mistakes over and over again.
No Emergency Fund to Fall Back On
Most emergencies that require money to fix can usually be remedied with a quick swipe of a credit card if you’re short on cash, but if you aren’t a fan of credit cards and those deadly interest rates, you might be in a bit of a pickle when an emergency arises. One of the biggest financial mistakes we constantly make is not building an emergency fund. If ever you lose a job and you’re without a steady income for a period of time, things might get worse very quickly. Having a savings that will get you through at least three or four months is–or a few weeks at best–will keep you afloat for a short time. If you never got in the habit of saving up an emergency fund, you might have to start selling off your dearest possessions to stay afloat if worst comes to worst.
Since the financial crisis that this country saw some years ago, it’s almost impossible to get loans or financing for anything personal. Counting on a bank to help you out is not in your best interest. Nothing is better than having a cash cushion to pull from to keep you in high spirits during your toughest times.
Not Enough Insurance Policies
People seem to know about the benefits of investing in a good life insurance policy that will cover their debts and provide for their families, but they seem to overlook the advantages of getting good disability, theft or home insurance. It’s rather difficult to think about being hurt in an accident or being burgled or a fire burning your house down, but another one of the huge financial mistakes we make is not getting the lesser-known types of insurance there are available.
Forgoing a Will
Humans are very fearful creatures that have a hard time coming to terms with death. Thinking about dying one day or dying from some sudden cause is terrifying to most people, and for that very reason writing a will seems to always get reserved to being done when we’re “older”. Even if we’ve got a will, we don’t update it as frequently as we should. This is another one of those huge financial mistakes. When you are gone, your beneficiaries will have a mess of figuring out your wishes if you weren’t regular about updating your will. Get over your fears and face facts!
Another one of the massive financial mistakes we make is not fully realizing the gravity of the purchases we make. With our world as oversaturated with aggressive advertisements as it is, we’re constantly tricked into believing we need unnecessary things and that we can afford anything if we depend on deals, rebates and special payment options to make it happen. Putting everything on your credit card really only costs you more in the long run, and even cash purchases cost more than we first think if you factor in all the labor it takes to produce those hard-earned dollars you spend.
Buying and Selling All Willy-Nilly
The stock market can also play you like a fiddle if you give in to the discrepancies that exist within it. Most people are in the habit of buying when a stock is already rising high and selling when a stock falls even the slightest bit. If you’re in the business of trading stocks, you could be making another one of those big financial mistakes in that regard.
Thorough research of the stocks and company you’re looking to buy from will always be important when it comes to making a profit. Avoid your urges to buy and trade when the slightest shifts happen.
Do Better for Your Finances
At the end of the day, it will be up to you to avoid the most burdensome of financial mistakes. You sit in the driver’s seat and your perspective will guide you through all situations you face. If you do what it takes to prepare before you run into any hiccups, you will be able to think back and ultimately thank yourself for making decisions that helped shield you from despair. Sure, it’s very hard to start up and emergency fund and stick with adding to it, but if you do it now, you won’t be desperate in a time of need that will certainly come around, even if it’s not very severe. Stop following your old, hazardous patterns and make it your priority to start anew on a fresh track!