COMMON MONEY MISTAKES TO AVOID
It is granted that almost everybody has the raging desire to become rich. However, what most people forget is that the road to amassing wealth is paved with abundant sacrifices. Despite this, omitting the place of sacrifice is one of the most common and equally the gravest mistake people make. To truly attain your personal financial goals, it is imperative that you let go of all and any of the habits that hinder your financial success. Letting go will seem very much like a difficult endeavour but it will prove worthwhile in the long run. Some of the detrimental money mistakes you make have been listed below.
Not having a budget
A budget helps you to take your income into consideration when making financial decisions. Actually, if you want to put your income into perspective, develop a budget. The reason it is said to be one of the keys to financial success is that it will make you conscious of your true financial health and prevent you from making impulsive financial choices. It is, frankly to say the least, simply catastrophic to not have a budget. Without a budget, it will be difficult to distinguish between the priorities of different expenses. It will be easier to spend compulsively and mindlessly a characteristic that won’t result in financial success.
Spending as much as you earn, or more
The practice of spending as much as you earn with no savings is very dangerous yet many people live this way. Worse still is the habit of living paycheck to paycheck and supplementing the income with additional debt or credit to sustain your lifestyle. While this reckless habit is often justified as necessitated by the necessities of life, it remains a core source of financial unhappiness. It is simply a happiness quick fix with no long term advantages, If you have fallen into this trap, it is imperative that you free yourself at this exact moment. It is a path that will lead you into deep financial graveness. The way out moreover, remains simple, develop a budget. From a budget it will be easier to identify unnecessary spending and important expenses. Additionally, to live within your means and save even invest. You will be steps away from achieving financial success once you quit this habit.
Only saving money that's "leftover"
There is a reason why one of the golden rules of finance is paying yourself first which essentially means putting aside your savings into a savings account preferably, before making any payments or meeting any expense. This should happen as soon as you receive your income. There are numerous benefits to prioritizing saving. Firstly, it reminds you of your bigger picture. Beginning to view your income from a future perspective will most definitely make you more conscious of your income use. Another reason is that it is easier to make regular savings before you use your income rather than after. That’s why the only-saving-money-that’s-leftover formula of saving is so disastrous. After meeting expenses, saving feels like deprivation. The underlying fulfilment that should follow saving is missed. Plus, needs and wants are endless. Waiting until all your needs and wants are met is synonymous to waiting endlessly.
Setting and forgetting your savings
Setting an amount aside for savings contributions is no doubt a very commendable step. Saving is after all one of the cornerstones of financial success. However, it is of paramount importance to increase your saving contributions as you progress financially. Your contribution need to reflect your income. Remember that your savings account should at least be able to sustain you for six months. Upping your contributions makes you attain such an amount at a quicker pace.