The world constantly dangles temptations before us, and it’s never been easier to buy stuff even if we don’t have the money. In this world we are all susceptible to making some basic financial errors which individually can be small. Added together, they can really hold us back from financial success.
Adding up the little things
Some simple examples we can all relate to:
It’s easy to spend $15+ on lunch from a café. Make your own and you could easily save over $10 per day. Multiply that by your working days and you could be saving over $2,000 a year!
Every year Australian’s throw away huge amounts of clothing that has never been worn, or only worn a few times. Beware fast fashion’s impact on your finances too.
Then there’s food. The average household throws away over $1,000 worth each year in food waste.
Add in other impulse purchases and it’s easy to fritter away many thousands of dollars each year.
Other common money mistakes arise from our poor use of debt, although these can be a lot more costly!
If you don’t pay off your credit card balance in full during the interest-free period, you could be digging yourself a debt hole that can be very hard to get out of.
If your impulse buys rely on the use of ‘buy now pay later’ services, it’s a sign that you probably can’t afford them.
Borrowing to buy things that immediately fall in value, such as a new car, is another quick way to blow some big dollars.
Even when buying an appreciating asset, such as a home, purchasing above your needs can leave you struggling to meet repayments, adversely impacting your financial position.
Finding a purpose
For many people, being aware of these money mistakes is enough to avoid the traps. For others, the instant gratification of the purchase or the pleasure in a fancy new car can make it hard to adopt new habits.
What if there was a clear, long-term reward for suppressing the desire for instant gratification? Something like a big overseas trip, upgrading your home or simply achieving financial independence and creating a life well lived.
Setting clear goals can make it much easier to forgo that flat white on the daily. How many coffees a week equate to a week on a Greek island? Tick them off on a chart so you can visually track your progress.
Or each time you suppress the urge to buy something you desire but really don’t need, give yourself a mental pat on the back. You’ve just brought forward the day when you can buy that new house or work becomes optional. Again, charting your progress can help you see what you’re achieving and help you maintain your motivation.
So have a think about your financial habits, and see how many fit into the basic categories of financial mistakes:
1. spending too much
2. not saving enough,
3. and making poor use of debt.
Then work out the goals that are important enough for you to make positive changes. You might be surprised by just how much some simple changes can contribute to your financial success.
Contact our team today to make sure your new found savings are working for you and creating a life well lived.