They say that money can’t buy you happiness, yet, most people can agree that while you can’t necessarily pay your way out of depression or anger, poor financial planning and habits can certainly contribute to a more stressful life. While money might not technically be able to buy you happiness, it certainly helps!
Getting your finances in order can be one of the healthiest things you do for your mental well-being, and in turn, physical health. After all, when you have enough money to be able to take care of your basic needs, eat well, and sleep well, this self-care takes form physically. In other words— maybe money really can buy happiness!
So, what are the most important things you should be doing with your money, and most importantly what are the most important things you should not be doing? Here are some of the biggest financial mistakes you can make, and how to avoid them.
Not Putting Aside Money for Retirement
While living in the moment is an admirable way to live your life, it’s also important to think about the future. Always think about the fact that one day you will no longer be regularly pulling in a paycheck, and unless you’re independently wealthy, you’ll need to have the means to be able to pay for your life.
Putting aside a retirement fund as early as possible is the best way to ensure that it will accumulate interest and give you the biggest return on your investment possible. Whether you invest in stocks, or real estate, the idea is to put money into something that will grow over time ensuring you can retire in comfort.
Not Budgeting
One of the most important things you should do for yourself is create a budget. A budget helps you stay on track with how much you should be spending in each area of your life. However, creating a budget alone isn’t enough. You’ll also need to make sure that you’re taking the right steps to actually stick to the budget!
Statistics show that over 60% of budgets that are created aren’t actually adhered to over the years. Yet, without a budget in place, it’s easy to overspend and accumulate more debt than necessary. The best thing about today’s digital age is that there are all sorts of tools available to you to help you budget.
Apps make it easy to create a budget and you can even automatically sync them to your bank account, ensuring that you don’t surpass your spending goals.
Paying Minimum
While debt can often be seen as something that’s all bad, the truth is that a little bit of debt is important for building credit. However, when you do build up debt, it’s important that you pay it off as soon as possible. Paying the minimum on your credit card bills will only lead to built-up interest, and ultimately extra financial stress. Pay as much as possible each month to rid yourself of the burden of debt as early on as possible.