• Stick to a shopping list: Only buy what you need and resist the urge to splurge.
• Implement the 24-hour rule: Wait a day before making a non-essential purchase to see if you still want it.
• Unsubscribe from promotional emails that tempt you with offers and discounts.

2. No emergency fund
Unexpected expenses such as home maintenance, car repairs, or a sudden job loss can hit hard if you're not prepared. Without an emergency fund, you might resort to high-interest credit cards or loans, which can snowball into significant debt.

How to avoid it:

• Start small and build up: Aim to save three to six months' worth of living expenses. Don’t be dissuaded if that feels like a daunting sum – even putting away a little, often, will make a difference.
• Automate your savings: Set up automatic transfers to your emergency fund to make saving easier.
  
  

3. High-interest debt
Credit card debt and other high-interest loans, including Buy Now, Pay Later schemes, can quickly become unmanageable, eating into your income with hefty interest payments. This can slow down your ability to save and invest for the future.

How to avoid it:

• Pay more than the minimum: Aim to pay off your credit card balance in full each month.
• Don’t be tempted to collect credit cards from multiple stores. The benefits are rarely close to being worth the exorbitant interest you’ll be charged on outstanding balances.
• Consider debt consolidation: If you have multiple high-interest debts, consolidating them into a single lower-interest loan can simplify payments and reduce costs.

4. Neglecting retirement savings
Putting off saving for retirement can have serious long-term consequences. The later you start, the harder it is to catch up and the less time your money has to grow through compounding interest.

If you’re a member of the Lifetime Master Trust, you can cross this one off your list! But just in case, here’s how to avoid it:

• Start early: The earlier you begin saving, the more you benefit from compound growth.
• Take advantage of employer contributions: If your workplace offers a pension scheme with employer matching, make sure you contribute enough to get the full match.
• Make sure you’re in the right fund: If you have plenty of time before you retire (more than 5-10 years) and you’re in a conservative fund, you could be foregoing significant growth in your capital over time. Revisit this article, if you’re unsure: How do you know you’re in the right investment fund?

5. Lack of diversification
Investing all your money in a single asset class or a few stocks can be risky. Market fluctuations can have a more significant impact on your portfolio, leading to potential losses.

How to avoid it:

• Diversify your investments: Spread your money across different asset classes (stocks, bonds, real estate) and sectors to minimise risk. The easiest way to gain exposure to a broad mix of assets is through a managed fund, like those offered by the Lifetime Master Trust.
• Regularly review your portfolio: Ensure it remains balanced and aligned with your financial goals.

6. Falling for get-rich-quick schemes

Promises of high returns with little risk are often too good to be true. Scams and risky investments can lead to substantial financial losses.

How to avoid it:

• Do your research: Always investigate the legitimacy of any investment opportunity.
• Consult a financial advisor: Seek professional advice before making significant investment decisions.

Remember, wealth-building is a marathon, not a sprint. By recognising and avoiding these common destroyers of wealth, you can better protect your financial future and stay on track towards achieving your long-term goals. Knowledge is power, after all!