It is no secret that the current global pandemic has forced so many to their knees financially.
And even though some people can see some light at the end of this dark, long tunnel, there is still some way to go for others when it comes to recovering what they have lost financially.
If you happen to be one of the millions of people financially affected, the last thing you want to do is make mistakes that will only compound your financial situation.
You want to ensure that you give yourself and your family some level of financial stability (no matter how small it is), enough to weather the current economic storm until life finally gets back to what it used to be.
So, are you currently struggling to save anything significant?
Do you want to become more financially stable this year?
Then you might want to avoid making the following money mistakes this year.
Not seeking financial advice
It is amazing how most people are ready to talk about almost any subject except challenges they are experiencing with their finances.
Believe it or not, every financial issue has a solution, no matter how unique you believe your situation is.
Besides, you will hardly find the help you need if you’re hesitant to open up about your financial struggles.
Even if you feel relatively secure financially, it is a good idea to keep up-to-date with helpful money hacks now and then.
Not organizing your funds
Separating your sources of income will help you prevent spending on things you haven’t planned for.
Before you can separate your funds, you need to create a financial budget for every month.
Your budget should contain both your sources of income and monthly expenses, including your various tax deductions.
Creating a budget will give you a clearer view of where your money goes and which spendings you can cut.
For example, you should separate your utility bills and grocery money from your rent and school fees.
If your tax deductions happen electronically, you can take advantage of options like an IRS audit reconsideration to help ensure that you’re not taken advantage of while fulfilling your tax duties.
Not creating an emergency fund
One of the bitter lessons many people have had to learn from the current pandemic is that having a financial cushion for unexpected times is very important.
Having an emergency fund gives you something to tap into when unforeseen events like job loss or even unplanned medical bills happen.
Without a source of financial cushion, you may resort to using more expensive means like taking loans to finance yourself.
Unfortunately, such options may also come with high interests and debts.
Experts advise that you set aside about three to six months worth of your expenses in your emergency fund and add smaller amounts to it regularly.
The best place to keep your emergency fund is in an easily accessible bank account that allows you to withdraw your funds without paying huge penalties.
Boredom shopping online
One huge ‘disadvantage’ of being locked up in your home for more extended periods than you’re used to is the need to entertain yourself with something.
Unfortunately, for many people, that means going on an online shopping spree.
Even if you’re not purchasing a new car or new home online, even the so-called smaller purchases can add up to significant spending costs.
Whether it is that inexpensive handbag you don’t need or that cheap watch you feel you should have, online shopping because of boredom is one money mistake, you should avoid.
Recent stats show that online shopping has increased significantly since the pandemic started.
Lacking awareness of the financial market
You may have had very little reason to pay attention to the financial market over the years, but this is not the year to ignore it.
Plus, you don’t need to be an experienced financial analyst to understand the money moves happening around you, especially when it affects your financial decisions.
Having a basic understanding of how the markets operate in the country you live in is crucial to make the right financial decisions.
Take, for example, the various government monetary policies, bonds guaranteed by your government, and the interest rates they come with.
Also, take a look at other areas of the financial market – areas like insurance and investment opportunities.
Even with a basic understanding of these, you should make suitable investments while avoiding common mistakes most people make.
(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)
