By the time we come to the end of our lives, I’m sure that we will all have things that we will regret.
Most of the time, these are related to our personal lives, such as poor relationships or long-running disputes with certain friends and family members. I’m sure that the majority of us would like to be able to turn back the clock so that we could make amends
However, some of life’s biggest regrets aren’t always to do with our personal lives. In fact, some people find that the majority of their big regrets turn out to be related to money. Finances and good money management are so important in our lives that any wrong decisions can turn into big issues that could haunt us for the rest of our lives. So, there’s no wonder that people try to avoid these big financial problems as much as possible.
Do you want to do as much as possible to try to protect yourself from making any huge financial errors? That’s definitely the best way to avoid being too regret later on in your life. To help you with that, here are some of the public’s biggest financial regrets and what you need to do to avoid them.
Not Saving For An Emergency Fund
We all know that it’s important to try and save up as much cash as we can, but many people are still forgetting to squirrel money away at the end of the month. Waiting to save in your life has a few disadvantages. Not only does it mean that you won’t have any extra money to treat yourself with or make large purchases, but it also means that you won’t have enough cash to use as an emergency buffer. We all need to save for an emergency fund so that we have enough money to fall back on in the event of an emergency. If we don’t, then an emergency like a house fire or flood could put us into financial difficulty and ruin your finances for the rest of your life. So, as soon as you are in full-time employment, it’s necessary to save some money at the end of each month. Even if it is just a small portion of your paycheck, this will still build up over time to ensure that you have a sufficient emergency fund.
Forgetting About Retirement Until It’s Too Late
Even if you are only in your twenties right now, you should still have some firm plans for retirement in place. Many people delay their retirement planning, but this is really a bad strategy. If you do wait until you are in your forties or fifties to think about your retirement finances, then you will end up not having very much time to save up for it. So, even though you might not be due to retire for another few decades, it’s necessary to put some plans into place right now. At the very least, you should be paying into a pension pot. As well as this, it’s also wise to set up some more savings that you can use once you quit work for good.
Not Using Savings Wisely
Of course, savings aren’t just for retirement or an emergency funds. They can be put to work in other ways too to ensure that you can enjoy financial independence throughout your life. One of the best ways to put your savings to work is to invest them. Investments, such as property and stocks and shares, can bring you potentially big returns on your investments, often more so than the interest that is paid into cash in savings accounts. Even though there is a risk that investments can lose value, they usually always recover and most long-term investments will help you grow your money. However, you should never forget about an investment’s potential risks, though, and these should be taken into consideration when choosing where to invest your money.
Failing To Prepare For Self-Employment
If you choose to set up your own business or work as a freelancer, you will need to prepare well for the self-employed life. Even though many self-employed workers love the independence that this career brings them, they don’t have many of the financial benefits and security that full-time workers will be given. So, it’s important to prepare well for this. If you do create your own company then be sure to put plenty of platforms and processes in pace, like Copper and cloud computing so that all your workflows are efficient and don’t waste any money. It’s also necessary to try to increase your savings so that you have a larger buffer that you can live off during periods of slow work. Taking out business insurance will also help you survive financial hardship in the event of any threats to your work or company.
Borrowing Too Much
Whether you need more money to help your business or your personal life, it’s always important to try and keep a tight check of your borrowing. If you fail to manage your loans and credit card bills, you might end up borrowing a lot more than what you realize, and this could end up quite dangerous. The repayments could be more than what you can comfortably afford, and this could then lead to a spiral of debt. If you end up with more than a couple of different loans and credit card bills, you might want to try consolidating all your debt to try to get back on top of the repayments. Doing so can make them a lot more affordable and easier to manage.
Borrowing A Mortgage You Can’t Afford
This is quite similar to the point mentioned above, but it’s still important to talk about. When it comes to purchasing a property, you should make sure that you can comfortably afford it. Otherwise, you could end up with a very large mortgage that you struggle to pay off each month. One of the main things to remember about your mortgage repayments is that they are influenced by the current interest rates. So, if the interest rate increases, so will your mortgage repayments. Because of this, you need to make sure that you would be able to still afford your monthly repayments even after a considerable rise in interest rates.
Taking Poor Financial Advice
There might be times in your life when you need to speak to professionals and take financial advice. This could be with regards to your business, being self-employed or your personal finances. However, before you do approach a financial advisor, it is very important that you do your research and make sure that you find a reputable one that you can trust. If you don’t, then you risk being given bad or poorly informed advice that could end up costing you dearly. For instance, you may be recommended the wrong kinds of investments, and you might walk away with less money than what you invested in the first place.
Not Taking Out A Life Insurance Plan
Insurance is one of the most important financial products that anyone can own. It is very versatile and there are numerous policies to cover different situations. At the very least, you should take out a life insurance plan so that your partner and children will be protected in the event of you losing your income or passing away unexpectedly. It’s a good idea to speak to a financial advisor about the different life insurance plans currently on offer.
Don’t end up regretting these decisions!