Planning your $$$? AVOID these common mistakes! 🙅🏻‍♀️

As we start our adulting journey and receive our first pay-check, we may start to take charge of our finances and kickstart our financial planning journey. We may face difficulties & make some mistakes along the way, but that’s totally normal!

Here’s a heads-up on the 5 biggest and most common money mistakes that we should steer away from ⚠️

1️⃣ Not budgeting your monthly salary 💰

Budgeting gives you a clear picture of your income and expenses. It allows you to take control of your finances by tracking where your money is coming from and where it is going. With a budget, you can make informed decisions about spending, saving, and investing!

2️⃣ Not building an emergency fund 🆘

Life is full of unexpected events and emergencies, such as medical emergencies or job loss etc. An emergency fund helps you to get through these unforeseen circumstances w/o relying on credit cards, loans, or going into debt. It acts as a buffer to protect your financial stability. Personally, I would recommend to build at least 6 months of emergency funds!

3️⃣ Not getting yourself insured ☔️

Insurance help to provide financial back-up during emergencies when we become ill or when we pass on. With the right insurance, we can be assured that our loved ones can still maintain their quality of life in case of our untimely death. It is especially important in SG since the cost of living and medical expenses are really high! FYI, insurance is the cheapest & easiest to purchase when we are young and healthy!

4️⃣ Not investing in your future 📈

Investing allows your money to work for you and potentially grow over time. By investing in assets such as stocks, bonds, mutual funds, real estate, or businesses, you have the opportunity to generate returns & build wealth beyond what you could achieve through saving alone.

The purpose of investing is also to help us beat inflation! Inflation erodes the purchasing power of money over time. For context, the inflation rate in SG is currently at about 5.7% as of May 2023. By investing, it helps us stay ahead of inflation by generating returns that outpace the rate of inflation.

5️⃣ Spending more than you can afford 💸

As our income increases, we tend to find ourselves spending more and maybe on things that we might not need! Spending beyond our means often leads to accumulating debt. Credit card debt, personal loans, or borrowing to cover expenses can quickly spiral out of control, making it challenging to regain financial stability. By spending within our means, we can minimize debt and maintain control over our financial situation 💪🏻

Financial planning is a process that evolves over time. It's perfectly normal to seek professional advice or resources to guide you through the process. Breaking down your financial goals into smaller, actionable steps and seeking support when needed can make financial planning less daunting & more achievable! 🙆🏻‍♀️

Feel free to ask me any questions! Like and save this post if you found this useful! 💯

#finance #personalfinance #Lemon8SG

*The information is meant purely for informational purposes and should not be relied upon as financial advice.*