Everybody makes financial mistakes at one time or another, but the sad thing is, most modern people keep on making the same mistakes over and over again.
Making mistakes is fine providing you learn from them and use them to help you grow. If you’re not learning anything, you’ll never feel like you have enough money and wonder what you’re doing wrong.
Below, we have 11 financial mistakes that most modern people are making. Take a look and see if any of them ring true with you.
You’re Spending For Short Term Enjoyment All The Time
Spending for your short-term enjoyment is not banned and is totally fine, on occasion. However, although many self-help articles are scolding us for not ‘living in the moment’, this doesn’t mean you should be doing the same with your money. Thinking of your future is crucial. Spending your money on things that can be classed as investments and make logical sense to buy is a must. The majority of people who spend on short-term enjoyment often live paycheck to paycheck, have no savings, and are in a ‘lack’ mindset when it comes to money.
Being able to stop and think before you make a purchase is very important. Experts recommend taking at least 3 weeks to think about something you want to buy before you actually hand over the cash. This can stop you from having big regrets down the line. Most of the time, you’ll forget about the item altogether and have more money as a result.
You’re Not Looking After Your Health
Taking care of your health can stop you from having expenses health issues later on down the line. Looking after your health now is safeguarding your future in more ways than one. You’ll protect your finances, live a higher quality of life, and enjoy life more. Taking care of your physical and mental health should be a priority to you. That being said, you can’t always help it if you become ill or injured – it won’t always be your fault. In cases like that, places like Law Office of Julie Johnson PLLC can help you to come up with a plan that should take some of the stress away and help you to sort out any finances you may be owed.
You’re Not Reducing Your Living Expenses
Take a look at your living expenses and you can almost guarantee that there’s something you can do to improve them. Can you switch to a phone contract and buy your own phone, rather than paying extortionate prices for the latest updates? Can you switch utility suppliers if you’ve been with the same ones for a while? Being smart and proactive when it comes to your living expenses is an absolute must.
You’re Living Off Borrowed Money
Living off borrowed money is a dangerous game to play. Having a credit card can be great, but only if you’re going to use it in emergencies. Using it whenever you fancy isn’t a good idea. If you need help to stop this cycle you’ve got yourself in, it could be a good idea to visit a financial advisor.
You’re Not Investing Anything
Investing your money is also important. This is where your money works harder for you, and you can build real wealth for the future – but you must be consistent, and aware that there’s always some level of risk involved with investing. There are apps that can help you to get started if you’re a complete beginner, such as MoneyBox. However, you can also teach yourself a lot using various resources online. Don’t wait until you feel like you know everything, or you’ll be waiting a while. Instead, start small and learn as you go.
You Haven’t Saved An Emergency Fund
Having an emergency fund will give you peace of mind and can help you in a number of situations, whether your car breaks down unexpectedly or you have to take a pay cut. Experts recommend saving 6-12 months of living expenses, but having any amount there is better than nothing. Not only will it put your mind at ease, but it’ll also stop you from taking out any dangerous payday loans and other loans with high interest rates.
Having a clear, concise plan for where you want to be in the future allows you to make much better financial decisions. What do you want to be working as? Do you want to be in a high up role in your company, or have a business of your own? How much money do you want? Where do you want to live? What do you want your retirement to be like? Asking yourself questions like this and being as clear as you can in your answers is a must. Most people have no idea where they want to end up, and this can lead to making very poor decisions regarding money!
You’re Not Tracking Everything You Spend
Tracking everything you spend can give you a better idea of where to cut back. It’ll make you think twice before making a purchase too, rather than simply swiping your card and not giving it a second thought!
You’re Not Getting Into A Positive Money Mindset
You can’t make positive changes regarding your financial situation if you’re not in a positive money mindset. Getting into a better mindset and building a healthier relationship with money is key! What are your limiting beliefs and how can you stop them from holding you back?
You’re Not Getting The Right Insurance
Having the right insurance, such as life, health, and even car insurance is crucial. You never know what’s just around the corner, and if you have people who depend on you, this becomes even more important.
You’re Always Swapping Your Time For Money
Swapping your time for money is common, but it isn’t great because eventually, time is something you’re going to run out of. Exploring passive income streams is crucial – this way you can begin to build real wealth and earn money while you sleep.