The following is a guest post by Mark from CurrencyConverter.
There was a time when all you had to do to secure your future was work hard for 40 years, retire and live happily on a reasonable pension. Unfortunately those times are gone, and in these times if you want to have a financially secure and happy life you need to put in the work from an early age.
So for all of you out there who are just starting out in life, here are 5 of the biggest financial mistakes people make and why they hurt your finances so…
Not Using Credit
Building a good credit rating will help you a lot in life, and in order to do that you need to prove to the world that you can borrow money responsibly and pay it back on time and in full.
A bad credit rating will mean that you pay more for your finance – things like mortgages and personal loans will be more expensive, which means you will pay more interest.
Using Too Much Credit
Some people go the other way and use up every bit of credit they can. Student overdrafts and credit cards are most commonly abused. But being in debt constantly for months or years can damage your credit, which will cost you in the future.
Use credit, but only use what you are sure you can pay back – and don’t take on more credit until you have paid back what you owe.
Not Saving For A Mortgage
Buying a house is probably the biggest expense you will have in your life and most people dream of the day when their mortgage is paid off. It is hard to think about when you are young, but if you put in the effort to save now you can save yourself many years of debt.
Mortgages tend to be cheaper the more money you put down – it means you have less to borrow and you get a cheaper rate; which means lower monthly payments. This makes life easier when times are good and also means that you can save more and look for other investments to grow your money.
Failure To Budget
You should always know what you are spending, whatever your situation. If times are good it might seem like you don’t need to worry about money, but the truth is that these are the times when you should be saving hardest.
A budget isn’t about depriving yourself, but figuring out what you are wasting money on. Figure out what expenses are worth it and which expenses you can cut. Cutting wastage will mean that you can live more comfortably when times are harder.
Above all else, apathy is the biggest mistake you can make. Financial success doesn’t have to be arduous, but it does take a little effort. Don’t fall into the trap of putting off sorting out your own finances.
Thanks for reading my blog post – my name is Mark from CurrencyConverter. I love to write about finance, currency and business and just generally helping people to acheive success.