avoid money mistakes

When we’re all feeling the pinch, it’s vital to hold onto the cash you have…

1 CREDIT CARD WITHDRAWALS

Getting cash out on your credit card can cost you dearly. For a start, the interest rate for cash advances is usually higher than it is for purchases. And, when you take out cash on your credit card, interest is added to your account straight away, even if you pay off the balance by the due date. Even worse, you may be charged a cash handling fee and when you take out cash from a credit card it goes on your credit report.

The one exception when it may be a cheap way to get cash is if you’re on holiday and you’re using a specialist overseas credit card – check out moneysavingexpert.com’s guide on this for detailed advice about using these.

2 LENDING CASH

If a friend asks to borrow cash it can feel hard to say no, but it’s a big mistake if lending gets you into financial difficulties yourself – so think carefully how you’ll cope financially if the money is paid back late or not at all.

3 ‘LIFESTYLE CREEP’

When your income increases, either because you’ve had a raise or moved to a better-paid job, it’s natural to want to spend more, such as on pricier skincare products or clothes. But instead of upgrading (aka ‘lifestyle creep’) just because you can afford it, why not keep to your usual spending habits and save the extra money instead? If that’s too hard and you want to treat yourself, perhaps opt to save half and enjoy half.