Mistake No. – 1. Not Saving
If you are between 30 to 39 years old, saving is non-negotiable. If you’re spending everything you’re making, it’s time for either a readjustment of your choices or your attitude; or look for a way to make more money.
Mistake No. – 2. Saving Without Investing
Saving is great–it’s a big first step if your previous lifestyle involved frittering away everything you brought in without a care in the world for Future You. But that money deposited and left in a bank account does far less for you in the long run than a couple of smart investments. From the high pay-off risky ones like crypto and hedge funds to safer bets like fixed deposits, the world is your oyster. Just don’t put all your eggs in one (dicey) basket. Investment is key
Mistake No. – 3. Not having an emergency fund
You might have your investments sorted, but it’s always a good idea to have a fund set aside just for emergencies; one that you can access without hassle at any time you need to. It is mostly used to sort out unforeseen medical expenses, home-appliance repair or replacement, major car fixes, or biggies like unemployment. At least 5% of your paycheck should be put into it, and create it in a way that gives you easy access to it.
Mistake No. – 4. Not having health insurance
The earlier you invest in health coverage, the better it is. It is advisable to have health insurance that can sort out any health challenge that can throw itself up so that you won’t go bankrupt trying to pay for healthcare.
Mistake No. – 5. Not discussing your finances with your partner
One of the building blocks of financial literacy is to discuss your finances with your partner. Spending and saving without the other partner being privy to the decisions is a big mistake for a person who wants to improve his financial status. This is especially true to avoid large purchases and investments that could have a ripple effect on your home and family finances.
Mistake No. 6 – Investing in kids and neglecting your retirement
The only investments scarier and more unpredictable than hedge funds? Children. If you’re having kids as an investment and only saving for their education and welfare, it’s not a smart move. Not only is it terrible pressure on your kids to perform and deliver quality life for you later. Invest in your kids out of love. Invest in your retirement out of practicality.
Mistake No. 7 – Overspending on cars and houses.
When your income finally feels stable and strong for the first time, it’s tempting to upgrade your lifestyle. Many people choose to do that in the form of new cars or houses.
Avoid expensive cars and homes until you’re at a financially secure point where you don’t have other debts you’re facing and can easily handle the extra expense even if you were to lose your job. If you’re not there yet, wait.