It would seem that when it comes to money, we want to have plenty of it but have no idea what to do in order to make it happen. Odds are you are unable to handle your finances properly and you make the same mistakes most people do. Some of these errors may seem minor at first, but are in fact so severe, that if you learn how to avoid them you will improve your financial status significantly. We are here to explore some of these lapses of judgement and make sure you never allow them again.
#5.Not keeping a close eye of your finances
That’s a huge mistake right off the bat. No matter how much (or little you earn), you should always be aware of the exact state of your finances. Closing your eyes and counting to ten, wishing your monetary troubles would disappear won’t make them go away (trust me, I’ve tried). What you need to do is face the facts and come in terms with the situation, whatever it might be. That’s the only way you can turn things around. Learn to adapt.
#4. Spending more than you can afford
We all want to have nice things – this is almost a human universal (unless you are a Buddhist or have other spiritual beliefs that made you reject material possessions). Naturally, sometimes we can’t afford the things but we try to buy them anyway. The end result is we have to sacrifice something else in order to make it until the next salary or even worse – ask someone for money or take a bank loan. This puts in a terrible position that will be hard to handle for the months to come. This is unnecessary, especially when it’s caused by an immature childish wanting for instant gratification. That good feeling after the purchase is not worth the next few months of financial stress. If you can’t afford something, just don’t buy it. Oh, and speaking of bank loans…
#3. Taking a bank loan you can’t handle
Almost everybody I know has taken a bank loan and almost everybody is complaining about the conditions of the credit. ‘It seemed like a good idea at the time…’, they all say while every month they deposit a significant sum of money in the bank, wishing they had read the fine print before putting down their signature. Most bank loans are not in your favour so before taking that step make sure that you have no other options. Also, be sure to consult with somebody who knows their way around the banks and is not paid to get you to sign a disadvantageous contract you will regret signing for a very long time.
#2. Spending your savings
How many times have you thought, ‘I need money for *insert something non-essential here* so if I can withdraw some of my savings in order to cover it, I will be able to restore it in no time…’ Um, I hate to burst your bubble, but you won’t. Not only that, but you will also most probably withdraw from your savings again. It’s like smoking a cigarette after you’ve quit – after the first, a second one will inevitably follow. The solution? Don’t start in the first place. You have been warned.
#1. Not saving for old age
Nobody wants to grow old but it’s not like we have a say in the matter. The only thing we can do is make life better for us we are retired. Most people don’t think about retirement and even though it works out for some, the best way to ensure that you are comfortable at old age is creating your own account and depositing a certain sum every month. The earlier you begin doing it, the better. If you start at a young age, it will help you build up your discipline and you will have to make much smaller payments in order to achieve the same result. If you don’t save for your retirement, it will be something you will definitely regret in due time. Be smart about it. You are building your future in the present.
Author Bio: Morgan Johnes is passionate blogger and writer. He work for a company which deals with leading options brokers. In his spare time he loves to read and write about financial problems.