We take a look at the 12 financial blunders that can leave you with a life of debt.
It seems obvious to say but spending too much money is a surefire way to get you into a life of debt. When we have money left over after our monthly bills have been taken out of the bank it can be tempting to spend it all. However, when we get into the habit of spending every last penny each month rather than saving it can lead to a life of being frivolous. Nobody is saying that you should save every dollar of your earnings but it should be noted that all of the quick $20 coffee and cake runs add up.
Whether it be bank loans, credit cards, or money from parents, when you live your life on borrowed money it can be hard to see a way out. Credit card interest rates can see you in a cycle of living, increasing your credit limit, paying the minimum amount each month, and moving from one credit card to another. Credit cards do have their uses but try not to use them all of the time and save for emergencies. It is also important to try and pay off as much as you can each month rather than the minimum amount.
Attending a Poor College
One of the biggest things we spend money on is our college degree and the associated living costs that go alongside it. It is important to research the college you plan to attend to ensure it is accredited and that the degree you are taking has a good chance of getting you a job at the end of it. When you attend a poor college that does not teach well you could end up graduating with a huge debt and the need to move from one under-paid job to the next.
Not Investing in Retirement
As we mentioned previously, spending all of your money when you are young and not saving can be a bad financial move. It is prudent to make monthly financial investments into a pension so that you can have a secure future when you retire. Without monthly contributions, you will need to work long-term, which may not always be possible if you run into health issues.
Quit a Job When You Don’t Have Another Lined Up
Quitting your job may be something that you have to do if you hate the work that you do or circumstances mean you have to move home, for example. However, no matter how much you dislike your job you should never quit before you secure another position as you could end up in financial ruin.
Refinancing Your Home
It is dangerous to use your home as a piggy bank by constantly refinancing to get you out of immediate debt. With house prices and interest rates fluctuating you could find yourself paying over the odds at certain points in your life.
Not Taking Control of Joint Finances
By automatically letting your partner oversee finances you can lose your way in how much money you are spending and saving. You may not always have your partner to rely on so it is important that you know your current financial situation and while you trust your partner they may need support in making the best decisions with your money.
Ignoring Your Bank Account
When you are living in the moment and not paying attention to your bank account it could lead you into financial stress. If you are happy in the knowledge that your wages are being paid into your account, your bills are being paid and you take cash out whenever you need it you can miss the times when a direct debit does not take out you enter your overdraft and start to pay fees.
Dating A Gold Digger
If you are financially comfortable you may be sucked into a relationship with someone who is out to get what they can from you. Being frivolous with your money can leave you vulnerable to people taking advantage of you when they ask you to buy them things and take them on expensive trips, for example.
Buying A Money Pit
If you fall in love with an old house but you can see that it needs a lot of work, think twice before you buy it. Sometimes our hearts can rule our heads when it comes to buying a house but if you buy a money pit you can look forward to years of costly renovations and little chance of someone else buying your property when you eventually get tired of all the work. Always listen to the advice of the surveyor before getting finance to buy a house, no matter how much you love it.
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