Many of us shy away from talking about finances, leading to a lack of open discussion and the perpetuation of bad habits. That's what we're here to change. As a mortgage broker who sees the ups and downs of financial decisions every day, I'm here to share some common pitfalls people unknowingly fall into, and how to steer clear of them.

Understanding Your Credit History

One common mistake is a lack of understanding about credit history. It's essentially a record of all your financial decisions, good or bad, and it significantly impacts your ability to obtain finance in the future. Many young people unknowingly damage their credit by making too many applications for loans or credit cards. Even if you don't go through with a loan, just applying can leave a "dirty mark" on your credit history. Be cautious about the number of applications you make; they might come back to haunt you.

The Importance of Making Payments on Time

Another mistake is missing payments. Even when you have enough money, being disorganised about where your funds are can lead to missed payments, which banks do not look kindly upon. Consistency is key to maintaining a good financial record. Always ensure the right amount is in the correct account when payments are due.

Building a Safety Net with Savings

A major error is not having savings, particularly for those with families. An emergency fund is non-negotiable. Whether it's medical emergencies, sudden repairs, or unforeseen events, having a safety net prevents reliance on credit and the cycle of debt. Depending on your circumstances, aim to have a few thousand dollars at least saved up as a buffer.

Utilising A Budget

While it might seem boring, having a budget is crucial, especially in today's cost-of-living environment. My husband and I take the time every pay cycle to review our budget, ensuring we're aligned on necessary outgoings and planned expenses. It's a simple routine that provides clarity and helps us prioritise.

Avoid Dipping into Your Superannuation

And finally, don't make the mistake of dipping into your superannuation unless absolutely necessary. What seems like a quick fix now could severely impact your financial future. Keep it there to grow, ensuring you have a stable retirement without depending on your children for support.

If any of these points struck a chord, you're not alone, and you can make changes today. These insights come from a place of experience, not judgment. My goal is to share knowledge in hopes it benefits you and prevents costly mistakes. For more on building better habits, I recommend reading "Atomic Habits" by James Clear. It might not be directly about money, but developing good habits can significantly impact your financial life.

Links

Website: https://goldentrianglefinancegroup.com.au/