I recent flew back to the UK from Amsterdam Schiphol airport. Kayleigh and I had just finished an amazing two-week trip travelling around Europe.
I could not help but notice the queue for the currency exchange for those departing for their holiday. The exchange rates provided in Airports are notoriously poor. It upsets me when people make mistakes with their hard-earned money. It is one of the key remits of my job as a financial planner: helping clients avoid the big money mistake.
Here are 7 mistakes to avoid with your money:
(1) Buying currency at the airport – just don’t do it. Your local supermarket or travel agent are very likely to have superior rates. The difference can be quite significant when you are exchanging a large sum.
(2) Not paying in the local currency – when paying on your card in a restaurant, supermarket, bar, hotel, always choose to pay in the local currency. Decline the conversion. Let your bank convert for you
(3) Buying a brand new car – around 20% of a new car’s value is wiped out as soon as it leaves the showroom. Unless the new car smell really appeals to you, buying “nearly new” is your best bet.
(4) Opting out of your workplace pension – you not only miss out on employer pension contributions, but you deprive your future self money towards your retirement
(5) Lending money to friends – sometimes friends can get into money trouble and ask you for help. What if they don’t pay you back? You notice they are on holiday. Surely that money could have been used to pay you back? It changes the dynamic of the friendship, and could ultimately ruin it. Best bet is to not borrow money at all, or accept that any money you lend may not come back
(6) Spending on a credit card to support your lifestyle – using your credit card as ‘free money’ rather than only spending what you have is a one-way ticket to financial ruin. The same can be said for overspending on ‘buy now, pay later’ services like Klarna: only buy what you can actually afford.
(7) Not having an emergency fund – having some money set aside for a rainy day will be really useful when life inevitably doesn’t go to plan. The typical scenarios include your car breaking down, the boiler breaking or home appliance packing up. Having the money ready will help alleviate the stress.
Hope this list has helped. Let me know if you have any money mistakes that bother you.
