5 Money Mistakes That You Can Avoid Now

Written by imoney

There is no denying that everyone makes money mistakes. It can be just as small as not getting your change at the counter or as big as spending all your savings on stuff that you don’t need. Big or small, they still are mistakes that hurt you financially so it is best for you to avoid them. What are the most common money mistakes that you commit? Here are some of them.

Becoming a One Day Millionaire on Pay Day

It is very important to differentiate that payday is not like Christmas, the season of spending. Payday is a day where you get rewarded for your hard work and get compensated for the efforts you make in your job. Think of it this way – you spent many tiring weeks to earn your salary, do you really want to spend it all in just a matter of hours clubbing, buying random stuff, and getting yourself drunk? Or do you want to use it to make your life better in the long run?

One trick to keep yourself from being that one day millionaire is by not withdrawing or cashing out all your salary. The tendency is- you still have cash, you still have money to spend. You can also directly make an appropriation of your salary when you receive it, like depositing a percentage of your money to your savings account. By doing this, you limit the money on hand, thus limiting your expenses.

Paying Monthly Credit Card Interest

Having a credit card is okay, but not having the monthly earnings to back it up always ends badly. There have been countless stories of people who spend more than they can afford and later experience financial struggles. Thus, it is a good idea for you to only use credit when you are sure you can pay it the next month or so.

A better idea is not having a credit card at all. If you want something that’s expensive then you just save and wait until you have the money for it.

Having Two Cars or Having A Car

Having a car when you can’t even afford is one way of telling the world that, I may not be able to pay for other necessities at least I have a car. I know, traffic in the Philippines, particularly in Metro Manila is notorious but if you cannot afford to buy one you can just simply relocate and live next to your office, who knows you may end up saving more money.

Unless you earn like Manny Pacquiao or Anne Curtis, you should only have one car. One car is more than enough to drive you to work or anywhere. Of course, if you buy another on top of your first car, then you have more debt than you can ever handle. You might even have to give up other things just to keep up with two high maintenance vehicles. One tip for buying a car is to look for one that has everything that you want your car to be. Chances are you eliminate the need of buying a new one.

Not Having Health Insurance

Medical bills are a prime cause of bankruptcy for several countries including the Philippines. You can only do so much to make yourself healthy, but there is always the risk of a medical emergency. It may just be a small bill for diarrhea, but it’s always handy to have an insurance to pay for some or all your hospital expenses. And if ever terrible accidents happen, you can be at peace knowing that you won’t be in a financial dilemma.

Putting Long Term Money on a Savings Account

Having idle money on saving account is good, but if that money is for long term, it’s not. The idea is this – if you know that your idle money will not be used in the next couple of years, then you should put it somewhere it can earn much more than the interest from a saving account (i.e time deposit, bonds, or other type of investments). If you compare the return that you’ll get from the interest on a savings account to the interest of a time deposit, the numbers are very far from each other. Thus, it is important to look for investment opportunities or ways for your money reach its best earning potential.