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CFP®, CERTIFIED FINANCIAL PLANNER(cm) and ![[CFP trademark]](../images/cfp_trademark.jpg)
are certification marks owned outside the U.S. by Financial Planning Standards Board Ltd. Institute of Financial Planning is the marks licensing authority for the CFP marks in the United Kingdom, through agreement with FPSB. |
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20 common mistakes that people make with their finances There are plenty of mistakes that people make when dealing with their finances. These are some of the most common – check them out and see how you compare!
1. Not living within your means.
2. Failing to work out your goals in life.
3. Not realising until it’s too late how important it is to make sound financial plans - and stick to them.
4. Using debt to fund lifestyle purchases rather than live within your means.
5. Thinking short-term without appreciating the longer term.
6. Assuming that you’ll live forever, never get ill, have an accident or have to take time off work unpaid, therefore not making any contingency plans.
7. Thinking that the state will provide you with a pension sufficient to live on in your retirement.
8. Investing into areas/assets that you do not understand.
9. Thinking that only wealthy people need to plan their finances or get professional advice.
10. Not considering the impact of rising prices (inflation) on your finances.
11. Failing to make plans for what happens to your assets after you die.
12. Not making a Will.
13. Leaving it too late to save or plan for your retirement.
14. Failing to “diversify” your investments. What proportion of your total “net worth” consists of property assets for example?
15. Following the latest investment “fashion” rather than building a sensible, well diversified investment portfolio.
16. Keep money on deposit? Sticking with the same account year after year could be costing you dear.
17. Are you spreading your deposits between different financial institutions to avoid any problems in the unlikely event of a bank collapse?
18. Waiting until the end of the tax year before using your ISA allowance.
19. Taking interest generated from your deposit account to supplement your income? Remember to take inflation and tax into account to work out how much is safe to take. You might be surprised to find it’s a negative number!
20. Buying/investing when markets/prices are high and selling when they are low.
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