Money Mistakes You Need to Stop Making
Have you ever looked at your bank account and wondered where all your money went?
Managing your finances can be tricky. Between bills, family responsibilities, and daily expenses, it’s easy to fall into habits that hold you back from achieving financial stability.
To avoid making these mistakes, you need to start by recognising them. Here are three common ones to look out for:
Mistake #1: Spending Without a Budget
This is probably the biggest money mistake most people make: letting your money come and go with no clear plan for where it should go.
The problem with this is that you end up losing track of your finances and might find yourself broke long before your next paycheck arrives.
How to fix it: Think of a budget as your financial roadmap, and creating one doesn't have to be complicated. Start with a notebook, a spreadsheet or a note app on your phone.
Write down your monthly income and expenses, prioritising needs (rent, food, and transport) and savings. After that, you can decide how much to spend on your wants (non-essentials like subscriptions or eating out).
The most important part of having a budget is sticking to it. Always check your spending against your budget to help you stay on track.
Mistake #2: Not Planning for the Future
It's easy to get so caught up in your current financial situation that you forget to plan for what's ahead.
This mistake leaves you unprepared for major life events like a medical emergency or retirement.
How to fix it: Start by setting clear, short and long-term savings goals. Once you have a goal, you can create a savings or investment plan to help you get there.
If saving alone is a challenge, you can explore saving with others through thrift savings on CircleFunds to keep you accountable.
Mistake #3: Getting Trapped in Debt
While taking loans isn’t entirely a bad idea, you need to be mindful of falling into a cycle of debt.
This could happen when you need to cover an urgent bill, and a quick loan from a friend or a loan app seems like the fastest solution.
But then you're unable to pay back, so you have to borrow from someone else to do so, and the cycle continues.
How to fix it: The best way to avoid this trap is to have an emergency fund to protect you from needing to take out a loan during an emergency.
But if you're already in debt, make a plan to pay them off. List all your debts from smallest to largest and focus on paying the smallest one off first.
Once that's done, you can use the money you were paying on it to tackle the next one. This strategy gives you quick wins and keeps you motivated until you're debt-free.
If you’ve been making any of these mistakes, the good news is that you can learn from them and do better moving forward.
And with CircleFunds, you don’t have to do it alone. Join a verified thrift community today and save smarter with people like you.
