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5 Money mistakes everyone makes

5 Money mistakes everyone makes

5 Money mistakes everyone makesNormally, it’s not intentional. But make them, we do. Money mistakes are sadly, all too common. And we see it often, when we chat to people who have decided that they want to come to The Money School. Often, because they’ve made one or more of the mistakes listed below and need help changing things around.

We asked some people to do a pilot version of the course and asked them some questions about money mistakes they were making before they did the course, and what they thought about those issues afterwards.

Are you making any of these common money mistakes too?

 

1. Managing money stresses you out

Before doing The Money School’s Financial Independence course, 82% of students reported ‘Money is something they find challenging to manage and stresses them out’.

 

After doing the course, 90% of students said ‘Managing money is something they have under control and is something they look forward to managing.’

 

It’s a no brainer isn’t it? When you put off dealing with something, it doesn’t simply go away. Rather, the problem grows with your stress levels. When you face the issues, and tackle managing your money in small, manageable chunks, things feel different. You feel empowered that you’re taking back control. And who doesn’t want to be in control of their financial future?

 

2. You have financial dreams, not goals. There is a difference.

18% of people had written financial goals before doing the course, whereas on completion of the course, they all had clear short, medium and long-term goals.

 

You want to retire young? Have a holiday home at the coast? Put your kids through university? Buy a franchise? Excellent. Those are great financial dreams to have. The challenging part is turning them into financial goals. Why? Because it’s hard. And it’s going to take effort, and a plan. As a general rule, make sure that that all your goals are SMART – specific, measurable, attainable, realistic and time-based.

 

3. Buying on credit

For those who weren’t yet in debt, 91% of students reported they would like to ‘Learn how to avoid debt’ before doing the Financial Independence course. Once they had completed the course, 73% said they, ‘Want to prefund and save for things in my life instead of just buying it on credit’.

 

Buying on credit is one of the easiest ways to get yourself into debt. It’s easy to want things now – and easy to justify how you’ll pay it back later. But unfortunately, interest on debt has a way of compounding, and then spiralling out of control. Basically, it’s the fastest way to ensure you won’t be able to achieve any of those financial dreams you have.

 

4. Don’t pay debt on time

Two thirds of the students that have debt, stated, ‘I pay my creditors when I think I can’, before they did the Financial Independence course.

 

By buying on credit, you’ll quickly become over-indebted and over time interest picks up and accumulates, catching most people by surprise. Financial education is the best way to solve this problem appropriately, and for good. Paying your creditors on time every month is a positive step towards having a stress-free financial future.

 

5. Spending more than you earn

When asked ‘How often do you spend more money than you earn or have available for the month?’ 45% of students said ‘sometimes’ and another 45% said ‘every month’.

 

Spending more than you earn means you’re taking many financial steps backwards, which is a recipe for disaster. Why? Because normally that means you’re either using your savings, or debt, to buy whatever it is that you can’t afford.

 

Sometimes you just have to ask yourself, is it worth buying those winter boots or going away to Sun City for a weekend when, realistically, you can’t afford it? Or do you want to build your wealth sustainably and be financially independent? If you are serious about having a worry-free financial future, then The Money School can assist you by equipping you with the important understanding and skills on how to keep your money and grow your wealth.

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