Money management – 13 biggest common money mistakes

Forbes has outlined the 13 biggest money mistakes that people commonly make. It is a very interesting read.  Number 1 on the list is not saving enough money for your retirement.  It is never too early to plan for your retirement but in the current climate many people don’t have the money to put aside at the moment.  If you have to put this off for a while, don’t leave it on the long finger.

At number 2 is “not having a game plan for getting out of debt” This is very common and if you don’t have a plan to get yourself out of debt, it is going to be very hard to get out of debt.  Having a game plan is simply sitting down listing all your income, expenditure and debt to see what you can afford.  This will help you with spending decisions as you work your way out of debt.  You are creating a budget. Number 4 on the list is “not having a budget.

Not having a budget unless you have more money than you can spend does not make financial sense.  A budget will show you exactly where you stand with your income and expenditure. You can see if you have any surplus money which you could save for your retirement or other larger expenses. It will also tell you if you are spending too much and need to reduce your spending.

Many people who do not budget can end up living from paycheck to paycheck, which comes in at number 5 on the list.  Without managing your money properly, you can end up living from month to month and loose control of your finances. It is not how much you earn, it is how you manage it.

And lastly at number 13 is “not having a plan for your finances.  For me this should be number 1.  Not having a plan for your finances is like going on a journey to a new place without having a map or knowing how to get there.  To manage your money properly you need to plan your finances starting with a budget and then write a plan for your goals.