We all make mistakes. Everyone does, even the likes of Warren Buffett, Elon Musk, and Bill Gates. The most important thing is to recognize them, learn from them, and find ways not to do them again.
Today we want to share five common money mistakes that might seem like no big deal now, but can easily become disastrous in the long run. Recognizing and fixing them now will put you in a healthier financial place decades from now. Your future self will thank you.
- Head in the sand – Have you ever avoided taking care of something because it scares you or you’d rather pretend it doesn’t exist? While it may lower your stress in the short term, putting your “head in the sand” tends to come back and bite you later on. Whatever you were avoiding usually comes back carrying extra interest, penalties, or repercussions that it didn’t have before. For example, you might be avoiding calls from your bank because you don’t want to know about your overdraft. Drag it on long enough and your bank will block your account. You will then have no choice but to face the bank, and you’ll be in a much worse position when you do. Much better to be aware of your financial surroundings and take care of issues before they escalate.
- Loans to cover living expenses – Many people live from loan to loan, spending money that they don’t have. Remember that just about every loan – including overdraft – charges interest, often lots of it. This means that you will be paying back all of the money you didn’t have to cover that expense when you took the loan, plus even more money. Without drastically changing your spending habits (and/or increasing your income), loans to cover regular expenses will dig you into an even bigger hole, since you will be spending whatever you spend per month plus loan repayments (plus interest).
What big money mistakes did we miss in this post? What money lessons have you learned from your mistakes?