You may be surprised by just how many people face issues with handling money, meaning that if you’re looking for a better way to manage your money, you’re not alone.
While we may be tempted to push these issues aside as small or irrelevant, when ignored they can pile up into bigger problems. Over time, money management woes can take a toll on every aspect of our lives, meaning it’s always best to take a look sooner rather than later.
We’re all guilty of falling into some of the pitfalls in this article at some point, but if you’re looking for advice, we’ve got you covered. At Salad Money, we offer affordable money lending services to key workers, giving us unique and valuable insights into money management.
We’ve put together a list of common financial mistakes everyone makes and how to avoid them from happening in the future.
Let’s get started.
1. Not Setting a Budget
One of the worst money mistakes people often make is not setting a budget. If you’re looking to save on monthly expenses, setting a budget is crucial to understand how much money needs to be spent or saved.
By separating monthly bills and utilities, you can have a better understanding of how to divide your income and keep a track of savings. It’s well worth taking the time to look at your finances and understand where you’re spending. This will allow you to allocate the money accordingly and lets you work out how much money you need for bills etc, and what you can spend elsewhere.
You could also consider following the 50/30/20 rule. This means spending 50% of your monthly budget on essentials and bills, 30% on what you want and other personal expenses. To ensure long term security, if you can afford to, adding the remaining 20% to savings is an excellent way to improve your finances over time.
If you're facing debt issues, borrowing money can help you sort out your expenses in the short term, without having to compromise on your savings.
We all need a little help sometimes; at Salad Money, we offer affordable loans to people working in the public sector that can help improve your financial stability over time.
To find out if you’re eligible, get in touch with us here.
2. Overusing Credit Cards
Another addition to the list of common financial mistakes that people make is overusing their credit cards. This is especially true for young adults who may not have much experience managing money.
While a credit card is an excellent way to build your credit history, allowing you to spend beyond your means, many people are in a position where they need to borrow heavily. When you factor in other expenses such as student loans that need to be paid along with bills that one needs to stay ahead of, adding credit card debt to the list will only cause further financial stress.
Staying aware of this trap is essential; we all need to make smarter decisions when it comes to spending as there’s a fine line between indulging in something and falling into debt.
The responsible use of a credit card allows you more flexibility over your finances, but managing it will prevent you from living beyond your means. However, if you’re under a serious amount of credit card debt, you can recover by choosing to apply for a personal loan to reduce the financial stress.
3. Living from Paycheck to Paycheck
With close to 40% of UK households living in financial distress, it’s no surprise that many people are living from paycheck to paycheck. This can leave you vulnerable to unforeseen financial problems that can mount up.
There’s a whole host of reasons why this happens, but spending money on luxuries you don’t need can put you in a precarious position. Whether through rising costs of living, unexpected bills or even Christmas and birthdays, it can be difficult to stay on top of budgets.
The ideal safety net to ensure you’re prepared for life’s unexpected turns is to try to build up a nest egg of three months worth of savings.
From the loss of employment to unexpected expenses, any changes in your living could drain your savings pushing you into a never-ending cycle of debt. This three-month buffer could be helpful in the most desperate situations.
Simply put, make sure you have enough savings as emergency money that can be used when required.
Contact Salad Money - Affordable Personal Loans For Workers
Ultimately, no matter how well we’re balancing our finances, life can throw curve balls our way that mean we all need some help.
Salad Money was founded as an alternative to the toxic lending system that existed to provide a new method of affordability assessment without requiring a strong credit score.
We understand common financial mistakes that people can fall prey to and strive to provide loans to workers that are affordable so that they don’t have to compromise on monthly expenses and can improve their credit score.
To check your eligibility or for any queries, contact us today!