Be it a piggy bank you’ve been keeping safe in a closet for the past ten years or a business bank account that you’ve put in the hands of a financial advisor, the worst thing you can do is lose track of money and turn a blind eye to problems that you don’t fully understand.
When people take loans or finance an expensive purchase on enticing “0% finance” deals, they rarely read the small print or take the time to look through all the terms and conditions.
Suddenly, they’re met with a nasty surprise 12 months later because they completely forgot about it, and suddenly they’re paying over 20% in interest on an item that promised 0% finance.
These situations happen all the time. Whether it’s overpaying for insurance that you don’t want, being sold a service you don’t need, or advisors conveniently missing a few clauses in their terms and conditions, you always need to keep an eye on your financial situation at all times.
Read the fine print
It doesn’t matter if you’re taking out a small loan or financing a new computer on 0% finance deals, you need to read the small print. The last thing you want is to add on extra payments, interest rates or be locked into a deal that you can’t get out of.
It’s important to remember that whenever you deal with credit companies, they’re after your money. They don’t make money by offering you a 0% finance deal.
There are always hidden fees and clauses that will catch you off guard and lock you into paying extreme amounts of money for something that was advertised as 0% interest.
The same goes for financial advisors. Unless you run your own business or have so much money coming in and going out that you need someone to give you advice, it’s best to avoid it.
Not only do you have to pay them money for offering advice, you might end up putting in financial advisor negligence claims if they get a little greedy and sell you insurance products you don’t need, neglect to help you pay your taxes or, even worse, commit fraud and steal money from you.
The first step is budgeting
Budgeting isn’t just for the sake of being frugal. Budgeting is a fantastic way to see where your money is going and how much money is coming in.
It’s the perfect way to track each and every expense that you have and to ensure that you aren’t overpaying for specific services, that you aren’t being charged more money than you should be for certain services, and that you aren’t bleeding money because someone is, quite literally, taking money out of your account.
Budgeting is one of the most important tasks for anyone that wants to save money and keep an eye on their finances. Without a budget, you really have no clue where your money is going.
It’s one of the essential components of proper financial management because the last thing you want is to be in debt because you spent too much money on luxuries.