Money Blunders To Avoid

If you often find yourself short of money, perhaps it's time to find out where you may be making mistakes.

Have you ever wondered why you never seem to have any money? Where does it all go, for Heaven's Sake! I sometimes wonder the same thing myself and then realise that a lot of it is going into savings so if I need more of a cushion each month all I have to do is cut back a little on supplementing my stash.

I'm lucky to be in that position but it was only because I made mistakes in the past. Fortunately, I saw the light and changed tactics but what follows are some of the money blunders I used to make. Are you guilty of them too?

Not budgeting

How often do you go into the red? If it's on a fairly regular basis then you must be spending more than you earn or, at the very least, being careless. The first step to budgeting properly is to find out where your money is going each month so keep a diary of every item of expenditure for a few weeks to see what's happening to it.

Then make a list of your earnings, outgoings and debts, using a Statement of Affairs calculator. You need a list of the essential spending such as mortgage or rent, council tax, utility bills and water bills, travel expenses, TV licence and car insurance. These are your priority payments, which you should meet before paying for anything else. Once you've established how much is coming in and how much you need to survive, you'll know exactly where you stand financially and will be able to identify any problems that you need to fix.

Borrowing too much

The Citizens' Advice Bureau (CAB) dealt with well over a million cases of debt last year. If you must borrow money, then learn how to do it sensibly and, if you're worrying about debts, then seek help from your local CAB, the Consumer Credit Counselling Service or Payplan. All of these organisations provide help and advice for free - and they will help you to negotiate with any creditors who are pestering you.

Not shopping around

Many people looking for a mortgage, loan or credit card simply approach their own bank. Look elsewhere. You can compare products by looking at our product centres, such as these for credit cards and loans. Remember that lenders are always keen to add to their customer base so newcomers are often given better deals than existing customers. Take advantage - it'll save you money in the long run.

Being too loyal

Don't be afraid to find a new mortgage lender, bank or credit card company. For example, if you don't manage to pay off your credit card each month, there are numerous 0% credit cards that offer interest-free introductory rates on balance transfers and some do the same for new purchases. Banks are also getting better at offering decent interest rates on current accounts and overdraft rates are getting cheaper. The same goes for mortgage deals and savings accounts. And if you've stuck with the same utility companies year after year, try comparing prices. It's easy to switch these days.

Not saving and investing

At current rates of saving for the future, only one in four people can expect to be comparatively comfortable in retirement. It would be a shame if you had to struggle for twenty or thirty years on the meagre State Pension after you've stopped working. That's if it still exists by the time you retire, of course! So, don't make the mistake of putting off a savings habit. Start today!

More: Use the Fool to compare credit cards, compare mortgages and to compare personal loans. And learn How To Borrow Sensibly and Why Rate Tarting Pays Off