THE BIGGEST MISTAKES YOU’RE MAKING WITH MONEY

Money mistakes are easy to make and could haunt you forever. Don’t wait for tomorrow to get ahead financially. Here are 12 financial biggies to be avoided.

NOT HAVING A PLAN FOR YOUR FINANCES

Having a plan in place for paying your debt and working towards financial goals is a must. Try to figure out where you would like to be six months from now and visualise how your money can help you get there.

VALUING YOUR SMALL CHANGE

It may only cost $2 to pick up a bottle of Coke or buy the kids an ice-cream. But it all adds up hugely. You could save thousands of dollars a year on frivolous purchases such as coffees. Just $25 a week spent on such things adds up to $1,300 per year.

LIVING ON BORROWED MONEY

If you live on the plastic or need to borrow money to buy goods for your home then you're never going to get ahead. You need a money attitude change if this is you, to start budgeting, and to learn to live without consumer goods. Credit cards are only your friends if you can pay them off in full every month.

NOT HAVING AN EMERGENCY SAVINGS FUND

You never know when you will need it. Setting aside just half a month’s income will probably cover you for where you need to be (think an airfare) but will it be truly enough? To set up a reliable emergency fund, think about setting aside six months’ worth of your income in your emergency savings.

BEING EMPLOYED BUT NOT SAVING FOR YOUR RETIREMENT

There will come a time when you may not be making any money but you will still need to support yourself in your golden years. A bit of every dollar you make should be going into your retirement fund.

NOT MAKING FULL USE OF YOUR EMPLOYEE BENEFITS

Read your employee pack and learn about all the perks you are entitled to. Discounted gym memberships, cheaper electronics, and better insurance policies could save you lots when you will need it.

A MORTGAGE OR RENT YOU CAN’T AFFORD

At some point you may realise that you are living in a house that is beyond your means and that you don’t actually need. Bigger bills come with bigger houses. If this is you, give some thought to downsizing. 

TAKING A STUDENT LOAN WITHOUT KNOWING WHAT THE REPAYMENTS WILL BE LIKE

Sure we would all like to go back to school. But before you take that student loan, put some thought into how much of your income it will eat into when you are finished.

CAR IS NOT AN ASSET

Let's make this clear: a car is a financial liability. It costs money and depreciates in value. Even worse than thinking a car is an asset is borrowing money to buy one. You'll be paying interest on a loan for a vehicle that is worth less than you owe.

LETTING YOURSELF BE CONNED

People everywhere are trying to con you out of your money, legally or illegally. If someone cold calls you or e-mails you with an investment — often too good to be true — be very wary. Likewise, be very careful about online and other scams.

FAILING TO REMEMBER THAT ECONOMIES AND FINANCIAL MARKETS GO IN CYCLES

Making money on the stock market can be easy. But remember all financial markets follow the boom and bust pattern, like night and day. There are no exceptions, only longer bull runs than others. Accept ups and downs as part of your long-term wealth generation.

THINKING YOU'RE INVINCIBLE

You’re not invincible. In share trading, foreign-exchange investing, futures and options and virtually any investment where investors get gung ho, remember that everything can be lost in a day. Make sensible decisions.