According to the results of a survey conducted by the American Psychological Association, 72% of Americans feel stressed about money at least occasionally.
Anxiety with money is entirely understandable, but there’s plenty you can do to get on top of it. The most important ingredient of any financial strategy is planning; you need to gather all the information you can before you make any decisions.
Once you have a solid plan in place, financial mistakes will become a much rarer occurrence. However, there are a few things you’ll need to learn before you attain the status of personal finance whiz!
Read on to learn the key ingredients of a financial plan that will keep costly mistakes at bay.
Stay on Top of Your Bills
Debt is one of the most difficult things for any financial plan to overcome. If you leave certain bills outstanding for too long (like credit card repayments) you’ll have to pay an extra percentage on them.
Make sure to stay up to date on all your repayments to avoid wasting money in this way.
Don’t Quit Your Job Unless You Have a Reason To
Nowadays, many people get inspired to quit their dreary day jobs and pursue their dreams. That’s a great thing to do, if you have a plan in place. Otherwise, it can be a disaster.
If you are going to leave your job, you need to save up money for a while first. You also need to estimate how long you’ll be able to survive without an income.
Be Careful With Big-Ticket Items
There’s nothing like the feeling of buying a new car, TV, or smartphone. However, if you’re spending a large sum on an asset you’ll have for a long time, you need to do your research first. If it ends up being wrong for you, it could end up costing a lot more than the price you pay for it initially.
Consider Investing
If you have money saved, you shouldn’t just leave it sitting in an account; interest rates are at historic lows. If you leave your money sitting in the bank, it will barely grow at all. In fact, it will actually get less valuable due to inflation.
To make sure this doesn’t happen to you, you need to invest at least some of your money. Stocks, bonds, and funds are the most common investment vehicles used by retail investors.
If you want to come at it a little differently, however, consider an alternative investment company.
Avoiding Financial Mistakes in 2021
Financial mistakes are easy to make, and they can be devastating. Learning to avoid them is one of the best things you can do, regardless of what stage of life you’re at. The steps we’ve listed here will provide you with a good platform to begin planning your financial future without fear of losing your way.
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