Well, the end of January 2014 is here and many of our New Year’s resolutions have already flown out the window! So much for the diet, stopping smoking and going to the gym! However, one New Year’s resolution that often gets forgotten is your financial health. It doesn’t matter if you have made mistakes with your finances in 2013, focus on the future and what improvements you can make.
So, here are 7 financial mistakes not to make in 2014:
1. You Don’t Have a Retirement Plan
Have you got a pension plan in place? No – why not? The sooner you start a pension, the smaller the amount you will have to pay in each month. Don’t depend on Social Security to meet all your financial needs.
You may think that old age won’t happen to you, but before you know it, retirement is looming and you are panicking because you will not have an income to live on. It’s never too late, so seek advice from a pensions expert and you can heave a sigh of relief and look forward to your retirement.
2. You Don’t Budget
How many of us think we have enough money in our bank account, but have then had an unexpected payment or direct debit taken out, leaving us in the red and having to pay bank charges? Setting up a household budget in a simple Word or Excel spreadsheet is easy and you will be able to see all the money that is coming in and going out of your bank account. Say goodbye to bank charges!
3. You Have Unnecessary Recurring Payments
Do you pay monthly for a gym membership that you only use once every couple of months, or maybe not at all? Spring clean your bank account, by seeing what direct debits you have coming out each month and cancel those that you really don’t need or use.
4. You Don’t Have a Will
It’s a fact; we are all going to leave this earth at some point. If you don’t have a will, then you are going to leave behind a stack of stress and hassle for your loved ones to sort out. Make 2014 the year you make a will. Remember to let your family know where it is and who will administer the will.
5. You Don’t Have Medical Insurance
Don’t think it won’t happen to you! As much as we don’t want it to happen, illness and emergencies do occur and usually at the worst of times. You or your family will need some form of medical attention. Make sure you have appropriate medical insurance. Check out the options available to you through your employer and also directly through options like the new Affordable Care Act.
6. You Are Living on Credit
Are you spending more than you earn? Do you use one credit card to pay off another, take out a loan to cover another loan? Living this way means that you are spending a fortune in interest charges. Credit should never be used for day-to-day expenses. Try to adjust your lifestyle to a more manageable and affordable level. Before you buy anything, think “do I really need it or do I just want it?” Stop impulse buying, try the 48 hour rule. If you really want something leave it in the store and go back two days later and see if you still want it just as much.
7. Are you Burying Your Head in the Sand?
Trying to pretend that you don’t have debt problems will just get you further and further into trouble. The interest charges will mount up more and more and you could even find yourself in court for non-payment. Don’t be ashamed, there are thousands of people in the same situation. Seek professional advice immediately, there are many organizations out there that can help you sort out your finances and make payment plans with your creditors on your behalf, so reducing the financial pressure on you.
So, come on, don’t bury your head in the sand. It doesn’t matter how deep in debt you are, it’s never too late to start sorting your finances. Don’t be afraid to seek advice from a financial professional and make sure you don’t fall into the trap of making the same mistakes in 2014 that you made in 2013.