Having regrets about money and financial management is not unusual – one survey shows that 95% of Brits had some level of financial regret so don’t feel bad about wishing you did something differently, most of us have been there. Sometimes it can be hard to move on from past money mistakes as we tend to get caught up in the past, but all this does is create further anxiety and stress, limiting you from making better decisions in the future. One of the best ways of avoiding financial regrets is to not make the mistakes in the first place. Here’s a list of the most regretted financial decisions and how you can avoid making them:
Not planning for retirement
One of the biggest regrets probably won’t come as a surprise to many – not saving enough for retirement. The survey revealed that nearly 60% of people regretted not putting enough money into their pension savings. This is one of these regrets that it’s extremely difficult to rectify, as you usually don’t get a chance to know you haven’t saved enough until you come to retire! One way you can avoid the stress in the future is to try to work out how much money you will need to live on per year once you retire. One study shows that you may need at least £24k per year – but of course, this varies on your lifestyle, debts and the age of which you retire. If you plan to retire at 60 will you have enough money to last you for another 30 years? Make sure you are putting away literally as much as you can every month, and don’t think of it as something you can spend when you need to!
Not seeking professional advice
Another major regret that people have is not getting any professional advice about what they should do with their money. As we move through life, money and finances become more complicated and knowing what the right decision to make gets surprisingly difficult, especially when you start to climb the career ladder and begin to make more money. Through talking to a financial advisor you can get a good idea of what you can achieve with your cash. When it comes to setting savings aside and knowing how much you need to put where, or starting to use your money to make sound investments, financial advisors come into their own.
Not creating budget
One reason why people find themselves taking on unnecessary debt is because they haven’t budgeted their money properly. It’s easy to underestimate how important setting a budget is, but if you are consistently over-spending you’ll soon find yourself running out of cash, and that’s when the lure of credit creeps in. To avoid taking on debt that you probably don’t need make sure you don’t bury your head about how much money you have to start with. Once you know exactly how much money you have coming in you can figure out what’s going out, and to where, then you can move forward and cut down (or cut out) any unnecessary expenses. Make sure you at least try to budget before you take on any credit, you might just find that you are able to thrive on what you have already!
Main photo credit: photoloni