There are several mistakes, that a lot of people do, when it comes to finances. These mistakes might appear as not a big deal, but when aggregated, and when they become a habit, then you have a recipe for financial problems.
so without further ado , here’s the …
Financial Mistakes Most People Do
- Not setting a spending budget : If you do not set a spending budget, you will probably spend above the the budget, and if this becomes repetitive it reduces your ability to save money. And this applies especially during vacations and trips.
- Putting desires above everything else : You desire something, you just buy it, without paying attention much to the financial situation you are in. You want a new car, a new Gucci bag, going to concerts, going to the cinema, eating in restaurants etc … No ending spending. That’s why you don’t have money saved.
- Buying without planning : You just go shopping without having something specific in mind, you end up buying twice more stuff. For me, this happens with groceries, when i don’t have a list i end up buying too many useless junk. But this can apply to anything, from clothes, to accessories etc … This will set you back few dollars, but not a big issue in my opinion. This can be problematic if the spending is for pricier items, like TV, cars, and so on.
- Not saving money : Not creating a habit of putting some money aside, will lead to you not necessarily knowing how to save money. Unless your income is way beyond what you need for living expenses. Saving money is a skill that is thought since young age.
- Credit card abuse : Many people use the credit card credit for covering essential expenses when the salary runs out. However, some people just use it as if they are entitled to it, and use it for none essential expenses, like for example: buying vacation trips, renovating the house, and so on … The problem with this approach, is that they will end up paying high fees and percentages on these none essential credits.
- Credit abuse : Taking a credit from the bank is sometimes a necessarily evil, car loan, mortgage, student loans, loan to pay the medical bills … There are a lot of valid reasons, to take loans. But, there are a lot of less valid reasons as well, and some people abuse with bank loans. Do not take more loans, if you already have, just to pay for some none essential expenses. For example: Some people take mortgages to buy a second house -as an investment- even-though the first mortgage have not been paid yet. Some take loans to change cars, buying a new car every few years. etc… The biggest problem with loans, is that once you have a problem and are unable to pay them, you will see the ugly side of the banks. Thus it’s better to limit the loans amount, and pay old loans before taking new ones.
Avoiding these 6 mistakes will go a long way towards achieving a sort of financial stability.
Do you know anyone who is making any of these financial mistakes ? Do share this article with your friends, and even tag them if necessary.