After our health and our relationship with God and family, the third most important thing in our life is money. If you have money, you can literally do anything you want. You can buy all the things that can make you and your family happy. So it is important to avoid the mistakes that will make you lose your money and make you broke eventually. Here are some tips on how to avoid these mistakes and manage your money:
1. Living beyond your means: I can’t assure you 100% how to be very rich but I can tell you 100% that the easiest way to be broke is to spend more money here and there, that is beyond what you earn. If you know your income and try to adjust your outcome relative to it, you would be better off and you will eventually make it in life.
2. Absence of a budget: in continuation to the first point, the second most important thing is budgeting. Budgeting helps you manage your money and gives you a clear picture of how much you spend .without a budget you will be going down a road that takes you through a deep hole of debt.
3. Insufficient emergency savings: we are humans and we are never sure of what will happen the next day in our life. God forbid, we might have some medical emergency or family emergency. So you have to be ready for such cases and you have to have emergency savings. Try to save at least three to six months of your expenses in a different account. Otherwise, emergency events can destroy your life and your finances.
4. Not saving enough for retirement: you may be very young but surely there will be a time when you will be old and unable to earn your living. So, it is essential to start saving as soon as possible. Remember these are your energetic and young days and it is now that you should save and plan for retirement.
5. Debt with high-interest rates: I know some people like to live comfortably with credit card debt. Credit card debt, which has a high-interest rate, will quickly accumulate and become too much for you to pay back. So beware, and pay off high-interest debt as soon as you can.
6. Not comparing prices in other places: This is the technology and information age and you have to take advantage of it in every aspect of your life. So, with the technology, it is much easier to compare prices and you should shop around for the best deals when purchasing a loan, insurance, or new product. By comparing and buying at cheap prices you will make the most out of your money.
7. Lack of insurance: Having insurance will help you avoid paying sudden big chunks of money at a time. Make sure you have health, home, auto, and other asset insurance.
8. Not making investments more diverse: To make ensure that your portfolio is well-balanced and reduces risk, diversifying your investments is essential. Consider investing in a mix of stocks, bonds, and other types of assets instead of just one so you will gain in some and may lose in some.
In conclusion, I would say, please avoid these financial mistakes and by doing so, you can help yourself achieve your financial objectives and ensure your financial future.
