7 common money mistakes – and how to prevent them

2 min Read Published: 25 Mar 2014

Common money mistakes

1. Not having a budget

One of the main cornerstones of keeping your finances in order is to create a budget. Once you know your income and outgoings on a monthly basis you can then start planning what to do with any spare cash you may have at the end of each month. Without a budget you are living blind to the reality of your financial situation and this could eventually lead you into a debt spiral as your outgoings rise far beyond your income.

Start today by reading this article - Start 'big picture budgeting'

2. Not having an emergency fund

Life is full of surprises and unexpected expenses can derail the financial plans of even the most prudent. It is often these expenses, such as repairs to your car, that can set your finances wobbling and lead to you incurring debt as a solution.

The best way to combat these nasty surprise is to build a financial 'buffer' in the form of an Emergency Fund. This fund is a sum of money kept separate from your normal budget and savings which you can use when life's little financial surprises come along.

Get started today by reading this article - Building an Emergency Fund - the what, why & how

3. Not having life insurance

It surprises me that people will often place insuring their possessions ahead of insuring their own lives. Just ask yourself the question 'how would my family cope if I died?' and reflect on the financial disaster that may befall your loved ones as they try to overcome your demise.

Life insurance need not be expensive so start protecting your family today by reading this article - Complete guide to Life Insurance - and how much you need

4. Relying on credit to get by each month

Being in debt can be one of the most stressful things in life, and whilst we may need to resort to credit for big purchases, using credit every month to see you through to payday is the fast route to financial disaster.

When you resort to quick credit offered by credit cards or, heaven forbid, payday lenders then you will be paying high rates of interest that could ultimately cripple your finances.

Make a resolution today to  stop your reliance on the is easy and read this article - How to become debt free

5. Not making a will 

Making a will is vitally important to protect your assets for your loved ones when you die. A will allows you to decide, not only what happens to your assets, but also who you would want to look after any children in the event of your death.

If you die without a will, known as intestate, your assets will be distributed by the rules of intestacy and this process will seriously delay the distribution of your assets on death.

Decide to make a will today and read this article Make a will (including why and how)

6. Not making the best of your savings

No matter who much or how little spare cash you have it is important to get the best return on your savings. The latest Budget has increased the amount you will be able invest in an ISA to £15,000 per year so it's important you take advantage of this tax-free saving vehicle.

To get the most out of your savings here are the best cash ISA accounts at the moment.

7. Not insuring your possessions

Most of us will insure our car but then leave our property or contents under insured, or without any cover at all. Just a small unexpected loss can leave your financial plans in ruins for the sake a reasonably inexpensive monthly payment. Even if you already have home and contents insurance make sure you are adequately covered on these policies so that any claim will be met in full.

Take the first steps today by reading this article - How to save money on your buildings and contents insurance