Six money mistakes that could hurt you in the long run

Dubai - Repeated mistakes could ruin the financial security of your entire family.

Bad financial decisions can be a cause for major anxiety with direct impact on your emotional state and wellbeing. Souqalmal.com reviews the six major money mistakes to avoid for a financially stable future.
Some money mistakes are intentional, some are unavoidable and some simply crop out of sheer ignorance. And there is every chance that you may face the far-reaching consequences of these financial mistakes more than once in your life. The first step in the salvage mission is, inevitably - moving on. It is important to be self-motivated enough to accept the situation, pull yourself up and take whatever knowledge you can from the experience. Progress beats perfection when it comes to making the right financial choices.
A financially secure future is the ultimate goal of every individual and the whole process requires great discipline and effort. Repeated financial mistakes, however, could sabotage the financial security of your entire family.
Following is Souqalmal.com's list of the most common money mistakes to watch out for.
Planning retirement too late
The importance of planning for retirement cannot be overemphasised if you want to continue living life on your own terms, post retirement. Contrary to how it might seem, retirement is never a long way off.
One rule that you religiously need to follow in order to build a sizeable nest egg is to start funding it as early as possible. You can start with smaller savings early in your career and gradually increase these savings as your income grows. Early retirement planning contributes significantly to a secure financial future.
Accumulating debt on credit cards
Credit cards are an expensive financial tool. Debt can pile up easily and rapidly. Paying just the minimum on your credit card each month mounts up your interest cost and it can take years to potentially pay off this debt, not to mention a lot more than you signed up for.
Trying to settle this debt can also distract you from other important financial goals like saving for retirement and emergency funds or buying a house. Even a small boost to your monthly payments can result in considerable savings on interest.
No emergency savings fund
Emergency planning is critical to the financial security of your family but is unfortunately, one of the most commonly ignored steps of financial planning. An emergency fund with at least three to six months' worth of living expenses insures you against any unforeseen events. It can make all the difference between a small bump and a major financial catastrophe that can throw you off track for years to come.
Living without a budget
As tedious as budgeting might be, it is a necessity. Keeping track of all your expenses including rent, bills, groceries and even smaller expenses like mid-morning snacks is important - because eventually it all adds up. With budgeting, you will know exactly where your money is going and where to cut back, if necessary. The importance of budgeting and effective money management cannot be stressed enough.
Not bothering to invest
While investments do involve an element of risk, they are necessary for building wealth and achieving financial security. It is easy to feel overwhelmed entering into the world of investments but it is important to understand that the money you earn also has great earning potential. Having a clear picture of your financial objectives in mind can help you identify investment vehicles that in turn will help you achieve your long-term objectives.
It may also be a good idea to seek the help of a licensed and regulated financial advisor, especially before taking large money decisions or making big-ticket purchases.
Trying to keep up with the Joneses
Spending for the sake of keeping up with your peers is certainly a poor financial choice. It is important to break from the herd and live life on your own terms. Trying to keep up appearances can easily turn sour because once the novelty of impulse purchases wears off, the consequences of bad financial decisions begin to surface.
The writer is the founder and CEO of souqalmal.com. Views expressed are her own and do not reflect the newspaper's policy.