13 money mistakes we made (So you don’t have to)
13 money mistakes we made (So you don’t have to)
Plenty of individuals have fallen into financial ruin because of money mistakes they could have avoided. Money mistakes serve as the main impediment to financial security over time and it is a factor that many people fall prey to in their younger years and live to regret in their advanced years. Financial experts and the experienced venture specialists who have had varied experiences and made the moneys mistakes themselves point out the aspects to check out for to avoid falling into financial ruin. 13 money mistakes that they have made and point out so you don’t have to include:
Extending loan repayment
Loan repayments are obligations that should be honored promptly to avoid running into an economic crisis. Be it student loans or business loans, sorting them early is the best way to avoid penalties and extra payments owing to accrued interests which are what bring the unwanted debt scenarios that mint finances to unprecedented levels.
Spending on depreciating assets
Depreciating assets like cars should not hold a huge chunk of your finances since they are losses in the making. Spending on depreciating assets is a recipe for doom since it can literally be likened to throwing money away. Deprecating assets are a poor hub for any extra cash you feel like spending and should be avoided at all costs.
Procrastinating saving for retirement
A money mistake that you cannot avoid to make is procrastinating saving for retirement. Your 65-year old self will appreciate the step to save for retirement that you take now and it should be noted that it is never too early to make the step to start saving. Start investing as early as possible with the very least being 3% of your annual pay or income.
Investments are what build wealth over time and not investing is a major obstacle on the road to financial independence. A money mistake many people have done to their detriment is procrastinating investing and thinking that investments need that one have a large chunk of money.
Disregarding wealth building
The only way to achieve financial freedom is to build wealth and ensure that you are well placed when it comes to the financial balance sheet. When you are focused on making money instead of building wealth, the end result is always a failed financial planning process which serves as a major money mistake.
Ignoring the concept of saving
Young people always think that they have a lot of time left in their future to work and grow their finances but the fact remains that you can never save enough. Saving is a process and should be initiated immediately with every coin you can spare.
Failure to have a budget is a grave money mistake since it is what leads to impulse buying which is what depletes the financial capacity of many individuals. Failing to create a budget and adhere to it is a money mistake most young individuals fall prey to and it is what hinders the culture of saving which ends up failing a person in their future years.
Lacking an emergency fund
Financial well-being can only be achieved when you don’t have to stress when faced with a financial demand or an emergency for that matter. Emergency savings are crucial since they provide a buffer if and when you are in trouble and need funds for an unexpected undertaking or obligation.
Short term financial planning
Time passes fast and with short term financial planning, it is very easy to find yourself in financial ruin very early in your 40s or 50s. Long term planning is key to success in financial development since it is what ensures you remain within the rails of money discipline.
Accruing credit card debts
The most common financial mistake that people have been characterized as making is accruing credit card debts. Spending beyond your means is what leads to the credit card debts and it is a money mistake that you cannot afford to have if you are targeting financial freedom I the future.
Being consumed by the mortgage game
Taking mortgages serves as a welcome way of getting the first home and enjoying the comforts of your own place but getting lost within the mortgage game is a grave mistake since it can put you in a place where you will be in debt for the rest of your productive life.
Ignoring beneficiary designations
It is important to constantly update beneficiary designations as and when necessary since it is what guides any allocation of finances. Beneficiary designations are legally binding and override a will which means they must be highly regarded and considered.
Failing to diversify income
It is crucial that you have several money-making avenues and income generating platforms which will supplement the overall financial account you have. Failing to diversify serves as a money mistake that simply eliminates the possibility of having the capacity to build wealth.