November 4, 2008

Common spending mistakes

Now is the time for people to get to grips with their finances, they have seen how things can go wrong and if they have not been affected then they are lucky, but should count this as a warning to get their finances in order.

By getting finances in order, it really means that being prepared for the worst can often mean that they can survive through this financial crisis, which is expected to last through 2009.

Below are some of the mistakes, which can be made, especially during a time when there was no financial crisis:

Concern rarely extends beyond the next payday or two
Only one person in the family knows where the money goes
Partners do not talk about their shared goals
There is no budget or spending limit, particularly for nonessential items
Family members and friends loan each other money without thinking about the consequences
There is no emergency fund
There is no plan for the unexpected death or disability of a wage earner
Children are kept away from money concepts
There is a pervasive anti-frugality, pro-consumerism attitude
Employee benefits are not well understood or utilized
Major purchases are financed by debt and often bought impulsively
Investments (particularly those for retirement) are not diversified

Source [MSN]