When people everywhere suddenly found themselves unemployed thanks to the pandemic, many of us were taught a lesson about money the hard way. It turns out that not saving enough money for an emergency was a big mistake. Q1 2021 hedge fund letters, conferences and more The Money Mistakes People Regret Making While it’s usually […]
4 min read
This story originally appeared on ValueWalk
When people everywhere suddenly found themselves unemployed thanks to the pandemic, many of us were taught a lesson about money the hard way. It turns out that not saving enough money for an emergency was a big mistake.
The Money Mistakes People Regret Making
While it’s usually too late by the time we realise it, just remember that learning from our financial mistakes is what really matters. So what other mistakes do people often regret making with money?
Not Investing Early Enough
It feels like you’ve got nothing but time when you’re young to start saving your money and learning how to invest while you’re still young. But life goes by pretty fast until one day you look in the mirror, and suddenly you’re 45.
Your hair is starting to go grey, and you’ve never invested a cent. Not investing money because it seems too difficult, or because it’s just risky, are both poor excuses. And they can keep you poor because the longer you end up waiting to start investing your money, the more it’ll end up costing you in missed interest.
In the end, investing is the only way you can really make your finances start working for you. The good news is that investing has never been as easy as it is today thanks to the latest investing technology of smartphones and stocks apps.
Start your journey by consulting with a financial advisor, and asking them to match your tolerable risk with your financial goals. And remember that your investments will generally need time to grow.
Poor Choice Of Relationship
People always say that love doesn’t cost a thing, but so many relationships end up costing big bucks. That’s because if someone in your relationship is mismanaging the money, love won’t stand a chance. Only when people get separated or divorced, they realize that letting their ex take care of all their finances was a huge mistake.
Or that falling in love with a spendthrift, or a gambler is why they never accumulated any wealth. And while they divided up almost no assets when it came time for the property settlement, they did get to share responsibility for all their ex-partner’s poor money choices and bad debts.
While the wedding is an expensive period in a couple’s life, it turns out that breaking up isn’t just hard to do, it’s also a huge financial strain. So before you decide to move in together or walk down the aisle, make sure you’re both on the same page as each other regarding your finances.
Spending Too Much Money
Money can certainly buy things which can make you feel happy. But trying to keep up with the Jones’ will almost certainly make you feel the opposite. It’s actually when you save up for something you want over an extended period of time which you’ll always end up appreciating so much more than any impulse purchase.
Plus, all that overspending on little things like fast food, Friday night drinks, and taking away coffee every morning before work doesn’t take long to really start adding up. Don’t believe it? Start keeping track of your spending, and suddenly you’ll realise that you just spent over a grand on coffee in a year.
Or you blew two grand on fast food lunches and drive-thru dinners. If you want to break these bad spending habits, simply start making your coffee and food at home. Almost immediately you’ll start noticing your savings adding up.
Getting Into Constant Debt
While it’s so easy to just start relying on credit cards to pay for everything once you get your first full-time job, unfortunately, it can cause some serious financial problems which only get worse over time. If you are only paying the minimum amount off your debt, it can quickly snowball from paying higher interest, not affording payments, and ultimately damaging your credit rating.
Thankfully the good news is that this is also the easiest mistake to rectify. When it comes to debt, just say no. No more. And never spend any more money than you make each month. Sound too simple? While it might be a little more difficult to follow, remember that all you really have to do is use some self-discipline with your budget and always live within your means.
If 2020 had you worried about the state of your finances, you’re certainly not alone there. Thankfully, by listening to those people who’ve made terrible money mistakes in the past, we don’t all have to make the same ones ourselves.