Financial Mistakes People Make at Different Ages

Although we can make mistakes around money at any age there are specific financial mistakes people make at different ages, generally through their 20’s, 30’s and 40’s. We thought you might find it a useful read.

Money Mistakes in 20’S

Spending too Much on Unnecessary Extras

When we are young it can be easy to get carried out with the latest gadget or high end luxury products that we really can’t afford but must have. Whilst we are all for treating yourself, it’s important to sit down and decide whether you can really afford the high expense.

Not Having Emergency Savings

This carries on from the first point. If you are spending too much on high priced goods, there may not be enough left over for saving. Sometimes even if there is, people in their 20’s don’t often see the benefit of saving, much preferring to be in the moment with their money. Having an emergency pot of savings means that whatever comes your way, you have money put aside should you need it. Putting away just a small amount each week or month will help build up an emergency savings fund.

Moving Out Too Soon

If we had a pot of money for every time we have heard, ‘when I am 18…’ well we would be quite wealthy by now. When people hit late teens and early twenties they often decide it’s time to move out, even if they can’t really afford it. Living with parents isn’t cool and so people in their twenties often move out into accommodation with others or on their own that is way out of their affordability range. It can also be difficult to manage balancing bills and other household payments. Whilst living at home might not be the best solution, it certainly can be financially for a while. Even if you are paying money towards the household, you will have much more left over for yourself and to save than if you were to move out and be fully responsible for bills.

Money Mistakes in 30’s

Buying a Bigger House or Car than you can Afford

Keeping up with the Jones’ is something that is more common in the 30s than any other age. Having survived the 20s it can often seem like the right thing to do, upgrading our house or car. This seems more common when we have had children and the house seems to be overflowing with ‘stuff’. Even those who haven’t had children find that in their 30s there is a burning desire to just go bigger. Chances are if you have had your existing home for a while you will have built up some equity in it. Rather than being hasty and moving to somewhere bigger, why not think of other ways you can create more space. It is surprising just how much clutter we acquire over the years. Still want to move? Set yourself a 3 or 5 year plan and work on saving some more money towards it. That way when you do move you will have some money behind you. Similarly, with cars it is easy to get something more luxurious and beyond what you could truly afford if you bought it outright. Lease and finance car options mean that there is always a better option available, but be sure you can afford the maintenance and that your mileage is covered. Sometimes buying a car yourself that is perhaps less of a luxury will be better in the long term. When you own the car yourself you also have the value in that if you do wish to change it. Leasing or financing often means you are paying for something you will never own and may end up having a bill at the end of it. Be sure to read all the fine print before you commit to anything.

Being in Debt

Once you get into having your own place, getting married and having children it can be easy to borrow money. Although having access to affordable credit is part of good money management, it doesn’t mean you have to run up debt beyond what you can afford to pay back. It is always better to keep borrowing to a minimum and pay things off before taking something else on. If you do find yourself in debt (at any age!) don’t bury your head in the sand, it will only make the situation worse. Seek help and advice because there is always a way to work it out.

Assuming You’ll Have Money in the Future

This will depend on the type of person you are and how you think about money generally. We can’t always assume we will have money in the future and so it is always worth having something set up for a rainy day and longer term for retirement. There are lots of options that you can look into and often employers provide a pension plan you can join.

Money Mistakes in 40’s

Not Having Enough Cash Flow

A lack of cash flow means that if the washing machine breaks down or the fridge breaks you might seek a loan from a high cost lender, just to get cash quick. Sometimes it doesn’t even need to be an emergency that means borrowing extra either. If you are living beyond your means or not having enough cash to cover day to day expenses, it might be time to assess your finances and give them a good MOT! Having enough cash flow means being able to save a pot of money for when you need it too. There are lots of budgeting tools online and ways you can cut back on spending.

Dipping into Savings

Sometimes we save for short term things like holidays or cars but it is always a good idea to have a pot of money saved for long term. This isn’t about paying for emergencies, but just saving money so you have something put by for later in life or when you are unable to work as much as perhaps you do now. Dipping into these savings can mean just a bit here and there with the promise of putting it back, but most often times we don’t. Try to avoid dipping into your savings and instead having a pot of money that you just use for short term things. If your longer term savings are in a higher interest account you are also losing money by taking it out!

Mid Life Crisis

Lots of people have them! It’s not always about having a sporty car (although sometimes it is). Forties do funny things to people when it comes to money. Whether that is booking an extravagant cruise, going crazy with buying a bigger home, redoing the house or a whole host of other expensive treats. Question your spending when you are in your forties. Although you are some way off to being at retirement age, it is worth being wise with your money. If you are spending extravagantly make sure you can afford it first and rather than making hasty decisions, give yourself time to think about them.

Financial Mistakes People Make at Different Ages

Truly we could apply many of these money mistakes to any age. If any seem relevant to you, take some time to figure out what you have coming in, going out and what you can save. Work out a savings plan, so not just short term saving but an emergency fund and long term saving too. If you get a pot of money built up you might also want to get advice on investing.

Whatever your financial situation just know there are always options for you both in saving and borrowing and lots of good advice out there to help you.

 

Categories: BLOG.

Affordable Credit for All

We are delighted to be part of a new campaign called Affordable Credit for All. Around ten million people in the UK are excluded from obtaining credit at reasonable rates because they are, or have been, in negative financial situations, usually not of their own making. This results in many individuals having to turn to loan sharks, very expensive payday loan companies or doorstep lenders to access credit. Over the past five years, the amount of money people have borrowed through payday lenders in the UK has boomed from £900m to £1.8bn. It is now estimated that 2million people use payday loans. 

Nottingham Credit Union, along with credit unions around the country offer an affordable lending solution – people are able to borrow money whilst still being in charge of their finances, as they know how much to repay and when. The interest rate on a loan from a credit union is much lower than payday lenders, doorstep lenders and loan sharks. In the UK, there are over 1.6million credit union members who were lent over £5 million during 2015.

We are working alongside NAN who offer advice to people on where they can get affordable credit from.  This partnership means that people are informed about credit, and will prevent them from sinking further into poverty and debt by being educated about affordable lending ahead of borrowing.   

This new campaign around Affordable Credit for All believes in raising awareness about affordable lending and credit unions, so that individuals have all the information and choices to make the correct decision when seeking to access credit to ensure that they are not stepping into a deep journey of debt and poverty.

We are proud to be part of the Affordable Credit For All campaign and support the belief that by working with other organisations that believe in financial inclusion and a need for affordable lending –more can be done to help the ten million people in the UK who are currently excluded from obtaining credit at reasonable rates.

If you are in debt, please seek help from NAN or any other reputable advisory organisation/service. We can help with affordable and responsible lending, so please get in touch.

Categories: LATEST NEWS.

Benefits of a Payroll Membership Scheme

With over 1.5 million UK members, credit unions are a responsible alternative provider of savings and loans.

What is Payroll Membership?

Payroll Membership is a hassle free means of regular saving and borrowing, with payments deducted directly from your salary. The money is transferred directly to your Nottingham Credit Union savings account, or if you are borrowing, repaid to your loan account and because the money is taken directly from payroll, it is a much easier way to save and borrow.

What are the benefits of a Payroll Membership Scheme?

As a payroll member you get lots of benefits:

  • Annual return on your savings
  • Exclusive Payroll Pro offers and interest rates
  • Affordable loans with fixed interest rates
  • No transaction fees on saving or borrowing money
  • Comprehensive online branch and facilities
  • We often lend when other lenders won’t

Major UK employers such as British Airways, Royal Mail, the NHS, offer payroll membership to benefit the financial wellbeing of their employees and because Nottingham Credit Union is a financial co-operative, joining means you are reinvesting in your local community.

How do I become a Payroll Member?

Whether you are an employer or employee, setting up payroll membership is easy. Visit www.payroll-pro.org.uk and find out more.

 

Categories: BLOG.