“Be afraid, be VERY afraid, the witching hour is upon us”.
Halloween, the day it’s believed ghosts and all things spooky come back into the realm of the living, is upon us.
Historically people feared leaving their homes and encountering one of the zombie like walking dead and so wore masks when they left the house so the creepies would mistake them for similar spirits! So in keeping with the spirit of all things scary and taking action to keep the ghoulies from the door, I thought I’d shine some light on monstrous money moves to avoid!
Around 50% of UK adults have never checked their credit reports according to Experian.
Our credit reports contain key financial and personal information about us and any errors could detrimentally impact our future ability to borrow. This could mean being rejected for a mortgage or having to pay a higher rate of interest if we do obtain one.
Not to mention the horror of not spotting an error which could indicate that somebody has tried or succeeded in accessing our credit or stolen our identity.
A mistake on our credit report could be a red flag to us that there has been an attempted fraud against using our credit profile.
Not knowing where your money is going.
I used to make this mistake regularly and got a nasty shock at the end of the month when I got my credit card statement.
Start recognising this zombie spending by keeping a record of where your money is going. Many of the digital banks offer options within your bank accounts to help you manage your spending and there are a number of good Apps to make this easier as well. Take a look at Virgin Money’s top 5 budgeting App suggestions.
No Emergency Buffer
Horrifyingly 10% of UK citizens have no savings and 33% have less than £600.
This is the part of the horror movie where the scary music is playing ominously, you know something bad is coming and the heroes have NOTHING to protect themselves with.
An emergency fund is a life saver. It protects us from unexpected and unforeseen life events and as Dave Ramsey says, “an emergency fund converts a crisis into an inconvenience”.
- Start saving now. Start where you are with whatever you have available to save no matter how small that may be. Set the target for creating an initial emergency fund of £1,000 and then look to building it up to 3 to 6 months of your monthly NECESSITIES. Those things you need, such as a roof over your head, food on the table and transport to get to where you need to be to make money.
- Automate your savings. If you have to remember to save this just adds a speed bump to the process. Make it easy and simple and likely to happen.
- Take a look at that zombie spending and get it neutralised. Whatever you save here can be used to create your emergency fund first and then for your other money goals.
This is not just any debt, it is your high interest debt. Your debt is messing with your stress levels as well as your financial flexibility.
It is time to exorcise this from your life and free your money to grow.
Lock up your credit card and start a moratorium on future debt spending, plan a strategy to attack your debt demons and tackle paying off your debts, especially those with the highest interest rates.
Living on Elm Street
Living to close to the edge and spending all that you earn each month will create your own nightmare on Elm Street.
Check what money is flowing into your life and what is going out.
This is SO important that it is worthwhile analysing incomings and outgoings for the last 12 months. Take a silver dagger to those expense vampires that are sucking the life out of your money. Identify amounts that really don’t need to be flowing out, subscriptions you don’t need and fixed costs you can slash.
Set up a conscious spending plan and work to increase the gap between your incomings and outgoings. This “gap” is what you have available to create that emergency fund, pay down debt, save and invest.
Set your finances up to be all about the treats and not the tricks with no scary money monsters lurking to pounce.