This article is about the basic financial mistakes to avoid that has caused many to suffer untold financial hardship. This article will also help to steer you out of any deep financial stress and give you the lift you need to have a comfortable financial lifestyle.
Financial education is important today because our existence and comfort require a level of understanding of how life revolves around having a sound financial healthy lifestyle.
There are several financial mistakes to avoid but we are just highlighting the top 7 popular financial mistakes that everyone needs to avoid.
Do not be an emotional spender because emotional spenders are easily carried away anything that will give them immediate gratification. They justify their spending by saying it cost only a few Naira or Dollar but they never really had time to think of the cumulative cost of buying things over time.
Over time, the little money you spend on drinks every day say just
N 500 daily, and within a year, this amounts to N 182,500 which is quite high or say you drink N 500 only on weekends that will cost you N 104,00 in a year. If you had saved is enough to fix a whole lot of things. What about the cost of buying data and airtime your phones which is a continuous thing.
The aim of this article isn’t to stop you from enjoying the comforts of life but to put checks and breaks on how you go about spending money.
After all, more people fall with the brackets of living below the foreclosure or bankruptcy phase but they just don’t remember that you are a few Naira or Dollar away from becoming and staying totally broke.
So, what you do with every penny counts and this is the only reason why you must be proactive enough to know these common financial mistakes to avoid.
2: Continuous Subscriptions Fees Is One Of The Many Financial Mistakes To Avoid
Think of lean methods to achieve the same or almost parallel results, do you really need to pay such a high fee for that comfort right now. Remember that you are in a state where you aren’t really too financially free or stable, so you may want to be calculative of what you spend money on.
Do you really want to continue paying for a cable subscription, fancy gym membership subscriptions, and several other online payments for a whole lot of things like movie, music, magazines, etc?
A leaner lifestyle is helpful for you on your journey to having a fattened savings and put you in the right direction as you climb up the ladder away from financial hardship.
A leaner lifestyle doesn’t make you lesser than anyone it is only there to help you to save more and it gives you more opportunities to raise cash for other investments.
3: Living Life On Borrowed Monies
Like we say in Nigeria Pidgin, life na packaging meaning that you just need to find a way to look big and attractive but if your looking big is based on borrowed monies then be ready to spend more on payment of interests and loans, debts, etc.
It won’t be a great idea if you lived on borrowed monies even when you have a steady flow of income if you live on borrowed money it just shows that you lack financial discipline which will keep you in living under growing debts.
Living your life on borrowed monies is definitely one of the several financial mistakes to avoid any time and any day because it makes you to spend more than you will ever earn.
4: Buying A Car With A Loan Is One of The Financial Mistakes To Avoid
Do not buy a car with loans because it shows that you can’t afford a car when you don’t have the cash equivalent.
But if you do buy a car with a loan, note this; before you even start to pay back the loan, you must have spent more money on car services and on fuel or gasoline.
So, when you add the fixed bills that come with maintaining and running a car to the actual interest and loan used in purchasing the car, you will be amazed by how much you are spending as compared to if you had saved up before acquiring the car.
Another angle to buying a car on borrowed money is that a car is a depreciating asset. Why would you spend more money on buying a depreciating? Please save up and buy a car if you must drive.
5: Spending Too Much on Your House
Note this in mind when buying or building your house; bigger doesn’t mean better unless you have a big and young family that will stay with you for a long time.
You will cost more in building or buying, and you will keep spending more during maintenance and it becomes an empty house when all your kids are all gone.
Always consider long term when acquiring a house, long term maintenance, taxes, fees, etc.
6: When You Do Not Have An Investment Plan
There’s a universally accepted law of making more money which is getting your money to work for you and that is exactly what investment is all about.
Investment in simple terms is getting your saved-up money to work for you and when that happens, you make more money, bank interest on your savings can’t be compared to the profit you make from the returns on investments.
You need to consult a qualified business advisor to assist you on this by matching your goals with the options available to you based on how much you have saved up.
7: Not Having A Plan Is Surely One Of The Big Financial Mistakes To Avoid
Get informed, learn about how finances work and do all you can to have a financial plan for your savings, or money because without a financial plan you will be headed for the rocks.
It is true how people spend quality time for their social life but scarcely has anyone be made to have a conscious plan which will lead to a sustainable path towards becoming free financially.
Having a financial plan means that you know where you are going and not having a financial plan is one of the common financial mistakes to avoid.
These common financial mistakes need to be avoided as much as possible and the best way to avoid making financial mistakes is for anyone to find a way to track all expenses which accumulate quickly.
It requires a carefully thought-through process to understand the difference between your needs and wants. If you understand the concept of needs and wants then you certainly will understand how to minimize financial mistakes or avoid them completely.
These are the top 7 financial mistakes to avoid by everyone and it is entirely our opinion and there are certainly more financial mistakes which are needed to be avoided or fixed by everyone.
Remember that there is a big difference between what you can afford and what you can make payment for because what you can afford is a onetime payment without passing through financial stress and what you can pay for, actually means you have to get to and get it.
Finally, have a savings plan because your savings is what will kick start your investment plans. The monies you have saved up becomes your capital and your starting point on investment.
These are a few of the financial mistakes to avoid by everyone.