Avoid These 7 Deadly Mistakes If You Don’t Want To Lose Your Money
The 7 mistakes and habits below have the wicked potential to make you broke fast! If you are not careful, you will always find yourself in the negative when it comes to your finances. Look out for these mistakes and always be mindful when it comes to your budget and your spending.
#1 No Budget
The sad truth is, many people live from paycheck to paycheck. Most of our money is gone in the first few days right after receiving our wages. If we don’t set a budget for ourselves we’ll most likely just spend it impulsively, pushed by our temporal financial freedom of getting paid. Most people will manage to do the bare minimum of meeting their monthly bills but then spend the rest quickly on a bunch of useless things. It is hard to keep track of the money when we just spend recklessly. So, sit down each month and work out your budget. Know what to prioritize and deal with all the important things first. This will leave you in a better financial position.
#2 Living a Life You Cannot Afford (Keeping Up With The Joneses)
It’s easy to want what others have. After all, who doesn’t want the finer things in life? However, when we focus too much on our creature comforts and less on our finances, we will end up spending a lot more than we can afford to. This is a dangerous trap that leads to debt and worst yet, bankruptcy. Most people end up accumulating a lot of useless things in life, just to live the semblance of a good life, trying to portray a certain lifestyle in order to impress their neighbors and friends.
#3 Chasing After Fashion and Trends
There is no shortage of bright shiny objects. There always seems to be something new that comes along that grabs our attention. For example, the latest gadget being released, a new shoe, or some fancy outfit. Many young people today lose their money this way. The materialistic view has pretty much gripped people today, seeking instant gratification. We are being programmed to always chase that new design. This means that each month, people are spending thousands on things that they do not need and it’s easy to get sucked into this insatiable vacuum that swallows all of our money. Be careful not to buy into this kind of lifestyle.
#4 Having Expensive Friends
They say birds of a feather flock together. If we hang around people who love to spend too much, chances are you’ll do the same. These are the so-called “friends” who’ll pretty much compel you to toss it all and use it all, you will find yourself using more than you can afford to. Instead, try to surround yourself with people who will encourage you to invest and save, people who encourage you to do something constructive and not just to spend every dime to have a good time. Our friends and companions can pretty much drag us into bankruptcy if we allow it and that’s because most people will do anything to please our friends or to be part of a group. Try to find friends who do not engage in mindless spending sprees, but ones that’ll actually encourage you to build wealth instead.
#5 Credit Cards and Debts
What better way to get instant gratification than to spend the money that you do not have? Many of us fall into this trap where we unwittingly spend large sums of money we have not earned yet. You must get out of the habit of relying too much on credit cards or some may call virtual cash. This is money that you have not yet earned and in most cases will have to pay back with interest. If you get too carried away, you will always live a lifetime of debt, up to retirement, and notice that you have no savings at all and no way to pay the debts. Credit card debts are very easy to accrue and very hard to pay off because of the accrued interests. And for those of you who don’t have a budget in place, it’ll be a constant uphill battle. So, sit down and work your finances out thoroughly before you put it on the charge card.
#6 Not Investing Or Making Bad Investments
Investing is a great way to build your wealth. In fact, investing is one of the best ways to boost your finances. However, one needs to be very careful when investing. Always be vigilant when you are about to invest in something. Research and learn more about it, read and ask for a professional opinion. This will help you know when and how much to invest. Never invest in things you have no knowledge of because the scammers are always preying on the ignorant. The world today is rampant with many Ponzi schemes and lucrative pyramid schemes that will rob you of your hard-earned cash faster than you can say “Get Rich Quick”!
#7 Not Saving Any Money
The tragic truth about money is that it is very easy to spend and a lot harder to save. Many of us, especially in our younger and more productive days, spend or lose money recklessly and never get to fully invest in anything worthwhile. We never learn, it seems. It is so much harder to save, especially when all you want is to live a good life. But having some savings is a good way to invest in your future. Those who do not set aside savings will constantly live from one paycheck to another until they find themselves at the age of retirement with nothing much to show for. Start saving today, try to set aside some funds each month. Life is very unpredictable and you should have some kind of investment and savings plan. Acorns help you grow your money.