Financial planning needs to be done properly in order to be successful. However, many people make crucial mistakes in the process, which can greatly affect them in the long run. In this article, we look at some of the main financial planning mistakes which people make.
Getting rid of medical aid
Medical aid can be costly, so it may be tempting to drop it in order to save money. However, this is not a good idea, as you never know what can happen. Just because you may feel that you have not gone to a doctor or had any medical conditions in a while, does not mean that you won’t need it in future. Without medical aid, you may find yourself in a lot of debt, should you need to have an operation or have any other medical condition treated. If paying off your medical aid is too costly, consider putting your money into a health savings account.
Relying on your credit cards
While credit cards may seem like a great idea, they are often hazardous to your financial planning as they can end up putting you in more debt. Make sure that you can pay your credit cards off at the end of each month, and don’t rely on them too heavily!
Putting off retirement planning
Many people think that retirement planning can be put off until one is much older, but it is better to think about it while you are still young. This can be a big financial planning mistake, so it is a good idea to think ahead and start putting money away for your retirement while you are in your 20’s. Making regular contributions will set you up for your future.
Overall: Remember, it is not too late to fix these mistakes. You can easily learn from them and avoid them in the future.