Making a money mistake is the easiest thing in the world to do, and a lot of the time we don’t even realise we’re doing it. Some of the worst mistakes are common, and these all add up to making life more difficult in the future, even if you don’t realise it at the time. Avoiding common pitfalls is key if you want to be more financially comfortable in the future. Below you will find some of the most common money mistakes we make, and ways to avoid them.

Not budgeting adequately

It’s important to be realistic when you’re budgeting, and in order to do that you need to be honest about your outgoings and the amount you need to live comfortably. Setting yourself a realistic budget means you won’t be borrowing from other sources and having to pay it back out of your wages again, which simply sets you back on the wrong track. Be honest with yourself and set an accurate budget and you will find you avoid this pitfall easily.

Resorting to credit

If you find yourself resorting to credit in order to make ends meet, then it’s time to look at your monetary situation seriously. Too many people rely on credit in order to go about their daily business, and whilst this is a quick fix to a problem, the only result is dire straits in the future. This is one of the most common money mistakes people make, and it’s important to think ahead in this situation and get help or ahead quick.

Drawing money from credit cards

You will pay a ridiculous amount of interest if you draw cash from a credit card, so if you do use your plastic, keep it for purchases only. The interest on cash drawn is usually substantially higher than that of purchases, and will be allocated first on your bill, meaning you’ll nearly pay back double of what you borrowed in the first place.

Blowing all your wages in the first week

We all know the feeling of your wages hitting the bank – you’re rich! Well, you are for that day, but do bear in mind that you need to make this last for the rest of the week, for some of us, fortnightly, even monthly. One of the most common money mistakes people make on a regular basis is getting the money red mist when they get paid, and spending too much in the first few days after pay day. Self-control!

Not putting money in high interest savings accounts

Many people don’t bother to research their options with regards to savings accounts, and just go for the easiest option. This is a mistake because you could be missing out on a higher rate of interest on your savings, which is money in your pocket at the end of the day. Do your research and seek advice if you need it.

Avoiding common money mistakes is just good common sense, and if you can manage to side-step these drawbacks, you will be much more comfortable as a result.

The team at IQ Accountants know all too much about common money mistakes and are here to help make sure you don’t make any. We prefer to see our client’s happy and enjoying life without the burden of money troubles. If you need help with accounting & bookkeeping, taxation services, or any business services, call our amazing team today on 5576 0011. Let us take a load off!

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