These include lack of budget, wrong use of emergency funds, and cost neglect

Financial services .. 7 financial mistakes that should be avoided in 2021

Budgeting is very easy, unlike many people think.

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Firms specializing in financial consulting, such as "The Motley Fool" and "Merriman", have identified seven financial mistakes that should be avoided during the year 2021, stressing the need to avoid the consequences of the absence of personal budget and the wrong use of emergency funds, as well as ignoring costs and avoiding negotiation while obtaining products Financial and others.

Here are the seven mistakes:

Absence of a budget

Many people avoid following a budget because they think it is boring or may take a long time, but in reality the budget is very easy, by looking at bank account and credit card statements for the past period, along with the cost of various bills, and including them in a spreadsheet, application, or even paper, Then compare spending with income to ensure balance. Without a budget, we might spend too much in certain categories and fail to achieve savings goals.

Emergency funds

We must be more realistic about benefiting from emergency funds, ideally there should be the equivalent of three to six months of living expenses in the emergency fund account, so that if unplanned financial obligations appear, they can be repaid without accumulating debts. It is tempting to use this money to buy luxury items, gifts, etc., but it is not considered an unexpected expense, and it is not an emergency. The purpose of the fund is to resort to it when the individual is in desperate need.

The cost of debt

Sometimes, despite our best efforts to avoid debt, we find ourselves needing to borrow from banks, especially when we are faced with high medical bills or things that cannot always be planned, but if we have to borrow money in 2021, several factors must be taken into account and a procedure Some research on products available in the market at a reasonable cost by checking whether an individual qualifies for a personal loan with generally lower interest than a credit card, bank facilities, fees and payment schedules, and ability to commit to installments within the set budget.

Ignore costs

When making purchases, especially expensive ones or subscribing to financial products, the focus is on the initial cost in the first place without giving priority to the subsequent costs that may require large adjustments in the personal budget at the expense of groups that have more priority, for example there are products such as cars and bank loans that have costs Continuous related to it, and the key with any purchase, especially the big ones, is to calculate the realistic ongoing costs within the framework of financial success and avoid debts that strain the budget.

Payment plans

It is certain that the timely payment of debts, bills and other dues increases the creditworthiness of the dealers in addition to peace of mind, as the absence of a clear payment plan has consequences on more than one level, and here comes one of the most important benefits of having a budget, as late payment will lead to an increase in the size of Fees and associated costs over the subsequent months, as well as its impact on the individual's ability to borrow money at low interest rates or negotiate various types of financial products that the individual may aspire to in the future.

Neglecting savings

Many believe that they earn for the sake of spending, but in reality money has many functions, for besides spending there is also saving and investment, and at all times we must not neglect the issue of saving, for with accurate calculation of expenses and expenses every month, the individual will know the surplus amount, if any, or may Resort to adjusting some categories of spending in order to direct the remainder to this purpose. The regular saving plan is a simple way to make the most of the potential of funds to transfer them to savings or investment programs, and the rule says if saving regularly, the small amounts will increase.

Neglecting health

Neglecting health problems will not only affect physical health, and in some cases may lead to high medical bills, and often treating a health problem early allows a medical professional to treat it with the least amount of surgical intervention possible and the lowest possible cost.

Neglecting health may end up with the need for more complex treatment that overburdens the financial budget and savings plans.

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debt and payment of

bills on time increases the

creditworthiness of customers.

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