5 common money mistakes to avoid in 2023

A woman making a mistake on the computer.  Australian currency notes.

Don’t stop repeating the same money mistakes in 2023. (Source: Getty)

From neglecting your finances to following the wrong advice, we are all guilty of making mistakes when it comes to our money.

And, according to financial advisor Helen Baker, these mistakes can cost you thousands in the end.

Here are five mistakes you can easily avoid in 2023.

1. Don’t care about your money

It can be easy to put your own money in the “too hard” basket and never deal with your money. But ignorance is not always bliss and it can be dangerous, especially if your partner manages all your money for you.

“Sometimes the person making those decisions may not be making the right decision for both of you or they’re missing an opportunity,” Baker said.

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She recommends taking the time to review your finances and make sure you’re both dealing with what’s going on. You may also want to consider getting a financial advisor who is responsible for both parties.

2. Taking the wrong advice

Sometimes it seems like everyone is offering money advice – whether it’s internet ‘finfluencers’ or well-meaning friends and family. But following the wrong advice can be dangerous.

“It’s usually thousands and thousands of dollars when you get something wrong,” Baker said.

“The advice really needs to come from someone who has a license, is an expert in the area and keeps up with the changes in the law.”

3. Expenditure

Aussies spend $13.5 billion a year on purchases they regret, with Gen Z and Millennials the most likely culprits of spending money.

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The word “budget” can feel limiting, Baker said. Instead, he recommends creating a spending plan where you list your necessities like rent or mortgage payments, groceries and gas, as well as things like vacations and spending money.

“If you don’t have a plan, it’s easy to spurn spending,” Baker said.

4. Strengthen your super

If you have multiple seniority accounts, it may be a good idea to consolidate them into one account to save on fees. But there are some things to consider first.

The biggest issue is the insurance that comes with your super, says Baker, including life insurance, income protection insurance and TPD insurance. By closing a super account you will lose these guarantees.

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“Very few people have clean bills, so they may need to keep those insurances,” Baker said.

5. Crystal contamination

If COVID has taught us anything, it’s that you can’t predict what’s coming. For example, Baker said most people didn’t expect the housing market to boom.

“Trying to figure out what’s going to happen and making decisions about what you do and don’t do is a great way to make another mistake,” Baker said.

The same logic applies to calculators that try to predict how much pension you will need in retirement.

“Life is more complicated than that, so it’s not a good idea to take math as gospel,” Baker said.

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