Three Rookie Financial Planning Mistakes to Avoid
For many people, life can be tougher than it actually needs to be, especially when we are talking finances. Some folks treat their cash flow and financial planning like the lottery or a game. They do not plan accordingly, and therefore, when things start to get stressful, they may be in a pinch that they did not necessarily need to get into.
Some 58% of Americans believe their financial planning efforts need improvement, but 34% of us have done nothing to plan for our financial futures at all, according to a newly released study by Northwestern Mutual.
Here are a few rookie mistakes to avoid:
Not getting professional advice
This may seem like a straightforward one, but the fact of the matter is a lot of people are nervous about talking to financial professionals, and some even feel like they will say something silly or sound stupid if they ask questions.
This could not be further from the truth. Getting advice from someone who really understands finances could mean the world of difference. Knowledge is power as Sir Francis Bacon said.
Budgeting
The rookie mistake that many make is to just swipe the card and hope there is money in the account. Not the best idea as this means you have no real way of knowing how much you have to spend until the bank declines your card, which can be at the very least embarrassing and at most dangerous.
Making sure you have a budget set is one thing, but doing it regularly for annual as well as monthly or even weekly can turn a household’s finances around. Knowing where you are spending and what you spend your cash on is a completely different way of living.
Living on borrowed cash
Getting a loan is at times the right thing to do, but if that is a solution to your problems then making sure you can pay it back is essential. High interest rates and badly worded terms in contracts could set you up for a long and awful relationship with a lender that could end in bankruptcy or worse.
If at all possible, it is best to not borrow but rather live within your means. This way you do not owe anyone anything and are able to live without the fear of letters of demand or large repayment bills turning up in the mail.
Making sure you do not make rookie mistakes is a good way to set up a prosperous future for yourself and your loved ones.
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