Come with me, dear reader, on a tour in which we learn about the Biggest Financial Mistakes that will haunt your financial future:
You don’t have a clear goal
One of the small things add up to the biggest financial mistakes, if you want to create wealth, you need to set a clear and precise goal before building a financial plan to achieve your goals and avoid financial mistakes.
The rich choose to commit to raising money. It takes focus, courage, knowledge, and a lot of effort, but it is possible if you have specific goals and a clear vision, millionaire Harv Eker says
The number one reason why people don’t get what they want is that they don’t know what they want.
All rich people have a clear vision and purpose, The Search for Wealth
Pay yourself first and save the rest
If you want to get rich, you must first pay yourself, save for the future.
What most people do when they earn money is pay it to others,
David Bach, a self-proclaimed billionaire explains in his book Automatic Millionaire. They pay the owner, the credit card company, the phone company, the government, and more.
Instead of spending money and keeping the rest, you have to save first. Save at least 10% of your total income.
Living beyond your means
You may see the way your friends spend without you having enough information about their economic situation, or you may match some of them in the way of spending so as not to appear in an embarrassing situation!
Outward spending and keeping up with the living standards of others are among the biggest financial mistakes that people make under the pressure of shyness to commit within the limits of your capability.
But remember that this behavior will lead to a fast loss of money and hinder you from building wealth in this golden time of your life.
It is important, to set a personal budget and stick to it, and track your spending first, do not be shy about living within your capabilities because this will hinder your financial development later.
Not establishing an emergency savings fund
One of the biggest financial mistakes you can make, you must have reached a good job level and get a relatively stable income, you may feel that all your affairs are fine and that the benefits of your job keep you from saving for emergencies!
But imagine with me if you lost your job! We are on the verge of economic depression, or you need urgent and expensive repairs in your home or maintenance of your car, how will you manage? your monthly income will not be sufficient to cover these sudden expenses
Therefore, it is necessary to establish an emergency savings fund that covers your monthly expenses for a period of three months. This fund is easy to access when needed without having to borrow from any person.
Reliance on a single source of income
We treat the job as if we were in a relationship! We are loyal to one job and owe loyalty to the boss, we put all our effort and time into one job only and we do not make backup plans alternative to it.
When it comes to work, we all make financial mistakes but it is okay to have a side business that brings you additional income, even if this income seems relatively small.
You can work in a part-time system, or you can make a small investment and grow over the years as long as you have a major job.
Starting your own small business is one of the most important steps that will achieve success in financial management in the long run, as it will provide you with a private source of income in addition to achieving financial freedom.
Lack of learning about financial management
Small things lead to big financial mistakes, developing your knowledge of financial management is one of the most important steps for success in the future, and achieving financial freedom and independence.
No one is born with financial management skills, we must develop our skills in financial awareness and financial planning, and learn to prepare a personal budget and adhere to it.
All this knowledge will affect the way you deal with money, if you do not read about financial awareness and financial management start from now, do not postpone that every day, it will have an impact and will be a step on your way to financial freedom and financial stability.
Carrying a lot of debts
With stability in employment, new consumption patterns begin to appear, but be careful, do not carry yourself indispensable debts, there is no need to commit to monthly installments to buy a luxury car or get the latest version of a mobile phone, remember that buying in parts means that The price will increase for you.
Also, resorting to borrowing with interest is a trap that is not easy to get rid of, especially if the interest is compound.
Therefore, do not resort to loans with interest because they will consume part of your income, and their easy conditions will always tempt you to take them.
Debt impedes financial freedom as it hinders any financial plans that achieve financial stability and independence, rather than hindering saving for the sake of investment, so the obstacle of falling into the debt trap must be overcome, in addition to the negative psychological effects, always remember
Less debt, Greater financial stability.
Avoid talking about money before the marriage
Marriage is one of the most important steps that a young man takes in his life, and it is considered a turning point in the life of the spouses. It is important and enjoyable to discuss the financial background for you both, you will live together so you must plan together as well, discuss your spending and savings habits, debts, and investments. Financial mistakes can ruin the marriage
Money is one of the main reasons for the emergence of conflicts between the spouses, because the way each of you deals with money differs, so it is necessary to find a common space between you in order to jointly plan financial and set common financial goals for the family in the future.
On the other hand, discussing money with your future partner will help in managing the marriage expenses better, and looking at it rationally, away from the outward and often emotional spending, there is no need to fall into debt for the next five or seven years for the preparation of the wedding ceremony!
Exaggeration in spending on the first child
In the thirties you will find yourself embracing a small being of love and happiness, you will strive with all your energy to provide him with everything that guarantees his happiness and well-being, you will buy him a lot of toys and clothes from a specific brand, but does your child really need all of this? And does this achieve better for him ?, You will wake up Suddenly on yourself and you’ve spent a good portion of your income on children’s toys and luxuries, it’s one of the biggest financial mistakes you can make.
Think with me, what is best for your child and your family in the long run. Buying toys or directing this money to an emergency provident fund or a savings account ?, Here we do not invite you to be miserly on your child, we just invite you to moderate spending.
The assumption that you will be richer in the future
You are still on the way to financial freedom, with achieving job stability you may change yourself that you will get more money in the future, but this will remain a dream until you start applying financial management for yourself and your family, working on developing yourself professionally, diligence and striving to start your own business.
Exaggeration in spending will not benefit you, and you will not achieve the development you dream of as long as you spend without an account, no matter how high your income is, you will see it evaporate before your eyes if you are not working on the financial management of your income, then income will be consumed in spending on luxuries and small expenses that you do not care about.
If you want to achieve a better level, you must start personal financial management from now, do not underestimate it, regardless of your income, whether it is very high or low.
Live from salary to salary
Working with a monthly salary is characterized by being low in risk, but working with a monthly salary means limited resources, as some rely on income completely, so it is necessary to act wisely in dealing with these limited resources.
It is noticed that some people are affected by a sense of wealth when receiving the salary, so they start unplanned spending, sometimes before fulfilling obligations without taking into account keeping the necessary limit for basic needs, which forces them later to borrow to complete the monthly expenses, and this is one of the biggest financial mistakes that someone who works with a monthly salary may make. It is necessary to plan how the salary will be spent, to determine the amounts available for spending and the amounts allocated to meet needs.
Working with a monthly salary requires the person to stay within a closed circle where he receives the salary and spends it for the remainder of the month in a state of austerity until the salary that comes after it.
There is no dispute that working with a salary gives financial security in terms of the presence of fixed resources, but it eliminates the incentive to seek to develop income, To avoid this financial mistake, it is necessary to plan for spending and allocate part of it to saving, no matter how simple, so that we do not resort to borrowing, and find an additional source of income that strengthens our financial position.
This leads us to the biggest financial mistakes, some people think that investment is only for the rich, so you find that the idea of investment does not come to the minds of middle and low-income people, remember that the huge companies that you see now are nothing but the growth of small projects that started in the past, all of them started with simple capabilities and a small budget, It’s just patience. It is also possible to invest in safe and low-risk investments or investment methods that are managed by specialized people who facilitate the risk of making wrong decisions, such as investment funds.
You Have To Think of saving as you think of investing
But before investing, you must save. Allocate a part of your income to long-term savings. You may not have a current vision about the investment you want, or you may be a student who does not see that the topic is important to you at the moment, but make sure that you will feel this step later, start saving now, no matter how simple the savings amount the accumulation of the saved amount for five years will be a good amount to start with. Any small idea, you will be able to take training courses that develop your skills in it to get better employment opportunities, start now, whatever your amount allocated to saving.
Financial Mistakes: Work for others
Working for others will not let you achieve wealth, you are working in return for your salary, but whoever you work for benefits from you to earn more and achieves wealth through you. If you are unable to do the work for this person, or your work is less efficient, or there are people who can do the same job with a lower salary or with higher efficiency, or both, then why does it keep you at work? His goal is to profit with the lowest possible expenses and you are from his expenses.
Not starting your own business
In your life, and in the end, you will reach a result, which is that you must work for yourself by doing your own project that will bring you an income. Your spare time and develop it over time and when you get a problem with losing work or upon retirement, you can rely on it, and if this project has achieved an income higher than your job or work, you can dispense with this job and devote completely to your project to develop it to increase your income.
You focus on saving money more than making it
Saving is important to create wealth, but you should not focus too much on it and forget to make money, It’s one of the biggest financial mistakes you can make, this does not mean that you should stop using practical savings strategies. But you should start thinking like the rich.
Some experts say:
It’s not important how much money you can make, but how much you can save.
but that does not mean that the process of making money should be neglected. To save money, you must first have it. As a result, the wealthy tend to generate multiple income sources and follow smart savings habits.
You are following someone else’s dream, not yours
If you want to succeed, you must do what you love. This means that you must decide and pursue your passion and dream, many people pursue other people’s dreams, such as their parents’ dreams, according to Thomas Corley, who has spent five years researching billionaires. Thomas said when you pursue someone else’s goals or dreams, you may eventually find yourself dissatisfied with your chosen profession. Change your habits and change your life. This will be noticeable in your performance and financial returns.
In the end of The Biggest Financial Mistakes
I hope that these notes about the biggest financial mistakes have alerted you to take advantage. We hope that you are always proud of yourself.