This is a good read more so for persons who have not cultivate the right savings culture. Manage your finances in the right way and avoid these seven deadly sins…
Managing your finances correctly requires a lot of discipline. Unfortunately, not all of us have that discipline and instead, we can get entrapped by the seven deadly sins.
Yes, believe it or not, the seven deadly sins of lust, gluttony, greed, sloth, wrath, envy and pride, can also apply to personal finance. Here, I’m going to reveal exactly how, along with what you can do to prevent getting caught out!
It’s easy to spot something in the shop window or online and wish it was yours. However, lusting after items can be dangerous and can lead you into the trap of buying things you can’t afford. Lust can make us impatient and instead of taking the time to save up for that desirable item, we simply whack it on a credit card and worry about the consequences at a later date.
But this can be a very dangerous game and what was initially a small amount of debt on your credit card can soon morph into a considerable sum of money. If you then find you can’t afford to pay it off, you’re in trouble.
To avoid this, you need to be far stricter with yourself and learn to budget better. Before you buy anything, think about whether you really can afford it. If you can’t, don’t buy it. If you really want it, put the money in a savings account and buy it when you can afford it. Alternatively, if it’s necessary for you to buy it there and then, pay for it sensibly.
Living beyond your means and paying for top-quality items and luxury holidays that you can’t really afford is also likely to lead you into trouble. Buying top-of-the-range food and designer jeans might make you believe you look good, but spending until your wallet explodes will get you nowhere — apart from in masses of debt.
If you end up taking out a personal loan to pay for your life of luxury or you’ve reached your credit limit on every credit card you own, you need to take a long hard look at yourself.
Stop accumulating all that stuff and only pay for what you really need and can afford. No one will judge you any differently if you switch to supermarket own brand food ranges instead of paying through the nose for the luxury versions, or for booking a three-star hotel instead of a five-star one. And really, does anyone study your jeans that closely?
Another deadly sin is being stingy and keeping all your money to yourself. You saw what happened to Scrooge, so don’t be greedy and hoard all your cash. Give some away to those who need it — you never know, it might make you feel good!
If you can afford to, why not set up a monthly direct debit to donate to your favourite charity? And with Christmas around the corner, there’s no better time to show your loved ones how much they mean to you. Giving them lots of lovely presents this Christmas should make you feel all warm and fuzzy inside!
Laziness can have a bad impact on your finances. Not bothering to shop around, switch accounts or open your post can lead to you wasting money, paying fees you shouldn’t have had to pay, and yes, you’ve guessed it, ending up in debt.
So before you apply for any financial product, whether it’s a savings account, current account, credit card or insurance, make the effort to do some research first.
What’s more, ALWAYS open your post. If you don’t, you may not know that your car insurance policy is soon to expire or your fixed energy tariff is coming to an end, meaning they may renew automatically and you’ll end up paying far more money than you should.
Failing to open your post could also mean you’re unaware of any fees you’re being charged on your credit card or whether the interest rate on your savings account is being cut. Read The dangers of ignoring your post to find out more.
Most of us get frustrated with our bank from time to time. Unfair charges, rubbish savings rates and poor customer service can all make us pretty angry.
But if you are getting angry, don’t just sit there and do nothing. Do something about it. If you think your bank has unfairly charged you for something, you can challenge it. Find out more in How to complain to your bank and win.
And if you’ve had enough of the poor customer service, switch to a better lender. First Direct, for example, is renowned for its excellent customer service. Meanwhile, if you’re fed up with receiving a pathetic rate of interest on your savings account, move your money elsewhere!
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Keeping up with the Joneses is something many of us are prone to doing. Seeing your neighbour’s brand new shiny car or your friend’s flash new iPhone can make many of us green with envy.
But if you can’t afford these items, buying them for the sake of impressing people is only likely to trigger the horrible downward spiral into debt.
So again, it all boils down to only buying what you can afford. Try to be content with what you have and stop trying to keep up with everyone else.
Finally, pride can prevent us from asking for help when we need it. If you’re really struggling with your finances, you need to swallow that pride and talk to someone about it.
Start by talking to a close friend or family member. Telling them about your financial concerns is likely to be a big relief and they may be able to offer help.