Money mistakes to avoid in 2020

Many South Africans find themselves in debt, while some are living beyond their means.

According to a report by News24, South African consumer debt is sitting at nearly R1.7-trillion. 

The good news is that the start of a new year offers the opportunity to do things differently.

Managing your finances well will ensure that you don't find yourself spending unnecessarily or absorbing more debt than you need. 

On Tuesday, #MoneyMistakesToAvoid trended on Twitter, with many users sharing sound financial advice to ensure that we don’t find ourselves making costly mistakes.

Let’s look at what financial mistakes Tweeps had to say must be avoided this year. 

Spending too much money on takeaways, alcohol, and entertainment

Takeaways can cost lots of money. The wise thing is to have a budget for takeaways and to stick to it. If your budget runs out, then eat at home. 

Going out with friends is also something we all love to do. Avoid spending most of your money on entertainment, because it is not a wise decision. Let your friends know that you have set a budget for entertainment and will be sticking to it.

Not paying attention to where your money goes

The only way you will not find yourself making the same financial mistakes as in previous years is to track your spending habits and see where all your money goes. 

Take charge of your finances by knowing your spending habits.  

Spending money before you receive it

If you are expecting money, do not make plans and spend it before you receive it. This will prevent a situation where, if something happens and you don't receive the money, you won't find yourself in a financial mess.

Having a savings account that makes it easy for you to withdraw money anytime

Having a savings account is a good way to save money, but if you know that you can easily access the money you have saved, you might end up giving into temptation and withdrawing the money. 

Rather open a savings account where you will need to give notice before you can withdraw your money. In that way, you will not necessarily withdraw the money anytime an emergency arises. 

READ: Dealing with finances in marriage

Not having a side-hustle

With so many South Africans losing their jobs due to retrenchments, it is important to have a Plan B. Start a new business, or have a side-job. That way, if you lose your job, you can still have money coming in from your other hustle. 

Lending money to others and not being able to say "no"

Do not feel guilty about saying "no" when people ask you for money, especially if you are not in a position to help. Sometimes friends and family members can take advantage of those who they know will never say "no". 

Taking out a loan on behalf of someone else

Regardless of how much you love and trust someone, don't get into the trap of taking out a loan for them. Only do this if you are prepared that if they don't pay it back, you will still be able to afford to pay back the loan without your own finances suffering. 

READ: Can you be charged more in interest than your original loan?

Buying goods on credit

Buying things on credit will result in you having to pay more for the goods because of interest. 

Rather save and purchase it later.

Below are more financial mistakes to avoid:

Image courtesy of iStock/ RomoloTavani