Top 5 Financial Mistakes to Avoid in 2017If you are planning to get your finances in order this year, all well and good. But if you haven’t thought closely about what happens to your monthly pay cheque and where all that money is going, you could be losing out. Some simple financial mistakes might be costing you more than you think:
1. Not Getting Control of Your Credit CardsIt can be tempting to pay off just the minimum amount of that pesky credit card balance each month but this could be costing you a lot of money in interest. It might be tough on your monthly spend to pay more than you contractually must to keep the company happy, but it’s better than essentially burning money and adding to your costs in the long term.
Our advice: If you have a credit card, try to pay off as much of the balance as you can each month.
2. Staying OverdrawnIt can be an expensive business getting overdrawn at the bank. Even with an authorised overdraft you can be looking at up to £30 extra on your expenditure if you are permanently in the red. Going into unauthorised overdraft can cost you even more, something that can easily happen if a big, unexpected bill suddenly comes along.
Our advice: Get into the habit of staying in the black and work on creating a slush fund that you can call on when those sudden expenditures do come along.
3. Not Tackling DebtThis comes again from behaviours such as only paying back the minimum amount, something that can happen when you have facilities like direct debits for loans and too many outgoings. This can cost you a lot in interest and means you end up spending more in the long run. If you have lots of different loans for different purchases, in some cases, you can be paying over 50% more than the original asking price. Look at Loan Consolidation to make things simpler.
Our advice: Look at your existing debt and work out a plan for reducing it as quickly as possible.
4. Short Term Financial ThinkingIt’s a common problem for many households, particularly when you are struggling to make ends meet. We just don’t budget properly and end up spending more than we should or getting into debt because we’ve signed up to too many ‘great’ deals. The biggest mistake that people make with their finances is not keeping a proper track of everything, something that can seriously help you to develop strategies for reducing waste, settling outstanding debts and saving money for the things you want.
Our advice: Get a budget planner and monitor your income and outgoings. You’ll be surprised how this will help you better handing all your finances in 2017.
5. Not Looking for Better DealsWe say it again and again, but it remains something that we are bad at as a nation. Shopping around for better deals can save you money, whether that’s for your insurance, your utility bills or your TV subscription. For instance, have you checked your insurance policy recently? Many have found that they have too much cover which is costing more than they need.
Our advice: Make a promise to check and compare prices for all your big outgoings such as utilities, telephone and broadband and TV subscriptions and swap if you find a cheaper deal.