Finishing the month, and moving to the next, it doesn’t matter how great you did, here are the most common, ten biggest money mistakes done:
1. Not paying attention
Confronting something only when it becomes a problem is not good at all. You need to get on top of the situation, sit down with all close to you persons, family, and discuss the financial situation and get everybody on the same page.
2. Paying others first
When it comes to money, you need to be self-centered. Pay yourself first, than pay the others. You will actually see yourself on cutting expenses and creating more income.
3. No Future investment accounts
Open two or three different accounts and place money there, and once placed don’t think about them. When the time comes for investing, you will be covered, without the need of a loan.
4. No emergency accounts
The unexpected always happens, and not having an emergency account will make it even worse. Start one and don’t touch it for nothing, only in real emergency.
5. Hating debt
There is a debt that needs to paid, and debt that creates income. The second one is good, don’t hate it. You need to get rid of all debts that cannot be funded by others or debt that doesn’t directly generate income.
6. Bad budgeting
The budget suggests what I am allowed to spend each month, and financial plan is a road map to create finances.
7. Not prioritizing expenditures
Here a simple scale can help. Take the last 60 days and rate the expenses from 1 to 5. Everything rated below 3 must be stopped.
8. Spending unconsciously
You need to know where your money is going, don’t use cash if possible. If not, just write down where did the money go and keep track.
9. Bad formulas
You need to quit calculating your income based on your current spending. Using this magical income formula will get you ahead: Future Savings Monthly + Emergency Funding + Current Spending = INCOME TARGET.
10. A money shortage mindset
There is no money shortage on the world, if there was they would print some more. Money maybe cannot make you happy but shortage of it can tear families apart. You need to help yourself out in order to help somebody else.