Published on April 8, 2015 10:23 am, by Jen Bakker
There’s a reason financial professionals exist. It’s because most of us are a little terrified of finance, and our brain hurts when trying to figure out unfamiliar terms and the ever changing rules. (Do they do this on purpose?).
The mistakes we’re making that are sabotaging our financial wellness are:
Not understanding how interest works and how much money it is costing you
Interest is the most common way that people throw away their money because they are afraid of math. They don’t know their interest rate or even know how it works, so they just ignore it.
“It is what it is.” “Leave it to the professionals. They know what it’s all about.” “It’s out of my control.” By thinking this way you could be paying hundreds, or even thousands, of dollars in extra interest fees that you could easily avoid.
DO: Get to know your interest rates and how they’re applied. Pay off your credit card in full each month and avoid being charged interest all together. If you can’t do this, find a way to lower your interest rate.
Not creating a budget and wasting money instead of making the most of it
One of the easiest and simplest money solutions is budgeting, but a lot of people just don’t do it because they ‘think’ it’s too complicated.
Well it’s not. A monthly budget helps keep you on track, and having one means you’re less likely to make impulse purchases. You will get to see where all of your money is going and start to track your progress. Are you still paying for that gym membership you signed up for last year and never use? A budget will remind you of these little doozies and help you identify places where you’re throwing your money away. And if you’re keen on saving, a budget is the best way to get you on the right track.
MoneyBrilliant has tried to make budget pain free by making the whole process automated so the hard work is already done for you. You just need to review MoneyBrilliant’s suggestions and amend it to your goals.
Not investing in retirement – when you could be saving on tax by doing so
Super can be confusing. It’s compulsory and it’s often seen as something that we just have… because. But super and retirement planning is not as complicated as you would think and it’s been set up to have some pretty good tax benefits.
There are many ways to demystify the ins and outs of superannuation. Talk to your HR department as they can most likely talk you through the process or consider talking to a financial adviser.
Many companies now know that financially well employees are more productive, healthier and happier, with some even introducing financial wellness programs into the workplace. Failing that, get in touch with your Super fund provider, it’s their job to help you manage your superannuation better.
If you really want to know how to master your finances and create a financially well future for yourself, come and join our community here at MoneyBrilliant. We’re creating a movement of financially empowered and well people who will drive positive change in the world, starting with themselves.
Will you be one of them?
Try this at home…
Take a lovely big cup and make yourself a super-delicious herbal tea. Stay with us… we’re on to something here.
When you’re feeling relaxed after staring out at the view for a minute do a fear-busting exercise.
Commit to fifteen minutes adding up what you’re paying in interest across all your loans and credit cards, write down your interest rate and do some searches for the latest interest rates.
How does yours compare? If you have a MoneyBrilliant account you can simply run a search on fees and your interest charges will be clear. It’s a moment of truth but you’re in the zone and ready for it!
Jen is an experienced banking professional who loves wine, coffee, finding a bargain and of course her three beautiful children. Since Jen's first budget led her to buy a home at 20, Jen has passionately helped others to make better decisions with their money.