3 money mistakes you shouldn't make this year

There is a reason you work hard to make money. And there is also a reason you save and spend wisely.

While you do these to up your personal finance, you must equally make sure your effort to be financially independent is not threatened by wrong financial decisions.

To avoid making financial decisions you might regret, you'll need to avoid these three mistakes.

1. Skipping a payment

When you have a payment or debt to settle, you are expected to repay it. You don't need to delay it.

If you have a personal loan or credit card, you have a contractual commitment to repay it. So, making the payment at the right time is what makes you credit worthy.

But if you delay it, it might become a huge bad debt as unexpected expenses might surface and further delay the payment.

2. Not creating an emergency fund

There are some things we don't bargain for in life that just happen. This is why it is very necessary to have an emergency fund. It is meant to serve as a soft landing when there is a financial shortfall during unexpected situations.

Don't ever wish away emergencies. And don't think it only happens to certain people. The fact that it can happen to anybody should be the main reason you should have an emergency fund.

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However, not having a financial plan for it is a terrible mistake you should never make. There may be a job loss, illness and other emergency expenses but with your emergency funds, you won't be caught unaware.

3. Borrowing debt you can't pay back

It is very easy to have access to credit and you it to meet certain goals, you can go for it.

However, if you know you won't be able to repay the debt in full or afford the monthly payment, then, don't take loans or any credit.

Taking a loan you can't service will not only render you financially useless, it may also affect your well-being.

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