What plunges people into abject poverty? For most, it’s making money mistakes. You spend a lot of money on things you can do without. You don’t address spending problems. And you barely budget before spending money on items. Maybe you have a love of online slots, maybe you just have to have that new dress!! We all have our shortcomings.
Most people make desperate choices about money. And it becomes a habit that affects their financial lives in the long run. You don’t want to sink into debts, live in shame, and worry about your financial future.
Avoid making money mistakes today by understanding where the problem lies. It will take some time to fix all these problems, but it is possible. This post draws attention to five money mistakes you are making and what to do to aptly fix them.
1) Falling behind on your payments
When you fall behind on your payments, you give rise to a vicious cycle. This cycle becomes unbreakable, then gets you stuck in a rut. What’s worse? You are charged penalties for getting behind on your payments. This puts a huge dent on your finances.
Paying extra fees draws more money from your account and leaves you trapped in a cycle that is hard to break from. To avert this mistake, make sure you’ve addressed all your spending problems. It helps if you can ask yourself important questions too.
- What do I spend the most money on?
- Do I have income issues that need addressing?
- Am I budgeting my money well before spending it?
It is necessary to take informed steps to address your daily spending. For example, you can choose to eat at home instead of eating out. Preparing home-cooked meals costs way less than say ordering pizza, burgers, or in general eating out with your family or friends.
Minimize on impulse buying as well. You lose so much money when you buy items or goods on impulse. Why? Because you end up paying for items you didn’t need in the first place.
Impulse buying makes you buy items you already have. Put it another way, it adds to your misery and leaves you digging deep into your pockets later on. Recognize your spending habits to break them. You’ll make smart decisions this way and you’ll never fall behind on payments.
2) Using credit cards for everyday expenses
When you use a credit card for everyday expenses, you not only risk running into huge debts, but also making costly money mistakes fast. That’s because you don’t have a limit on your spending. With a simple swipe, you can pay for items using credit any time you want.
This convenience credit cards offer is a pull factor especially to spendthrifts. So you are less likely to budget for your money and more likely to impulse buy. In the end, you’ll be inclined to overspend hence putting a strain on your finances.
The best remedy? Tame your urges when using a credit card. This requires discipline, though. If possible, ask a family member to hold you accountable on your credit card usage. Also, follow a budget to ease on daily usage of credit cards for expenses. Extra useful tips to consider:
- Calculate all your expenses and minimize them.
- Determine your income. Don’t spend more than you earn.
- Set saving goals as well as debt settling goals.
- Track your spending.
- Be realistic. Be wise when spending money.
Have a solid formula or ideal money-saving method in place to help kick your credit card habit. Otherwise, you will spend more when paying with credit which further sinks you in debt.
3) Taking loans from friends and family
Borrowing money from your family or friends will put a strain on your relationship with them. Usually, ties break when you don’t get them back their money and on time.
Friends, in particular, will cut links with you, question your financial decisions sometimes even speak about your spending habits.
Chances are, you’ll never get along with them. You’ll always feel guilty to face them say during family Meetups or in social gatherings. To save your relationship, don’t borrow money from friends or your family and find nearest cash loans options instead. It often works against you.
4) Choosing to stay at a dead-end job
When you opt to stay at a dead-end job, you don‘t have room or space to grow and become a better you. In fact, your finances hurt as well as your emotions.
A dead-end job is only good as a stepping stone. But don’t get too attached. Don’t stay too long. Don’t get too comfortable or else you’ll not live long enough to achieve all your goals.
A dead-end job gives you no room for advancing either. It stalls your growth, leaves you stagnated in the same position. If a job feels like it wasn’t meant for you most probably it isn’t. So move on. Make plans to find a better and well-paying job that boosts your self-esteem.
How to make plans? Learn new skills that suit your interests. Learn about other alternative careers. Enroll in a class to further your studies. It is important that you prepare, learn, and enhance yourself to become employable to other prospective companies and clients.
5) Failing to budget
Do you struggle to get by even when making decent money? That’s a clear sign of failing to budget. Failure to budget your money is a common money mistake that a lot of people stand accused of. When you don’t have a budget, you never have control of your finances.
Set up a solid budget. It helps you achieve your financial goals a lot easier than when you don’t have one in place. A good budget will help you achieve sound financial decisions. Do this month after month and you will see where your money goes, and what it does each month.
Understanding these money mistakes will help you find a reliable solution that works to save and grow every dime you work hard for.
Remember: Money mistakes arise when you don’t address everyday spending. When you take loans from family and friends. When you indulge in blatant credit card usage. Or, fail to set up a solid budget that helps account every cent you earn.
Practice good money management skills and plan on how to spend your money well. Then see yourself achieve financial goals and objectives better than ever before.