Financial mistakes to throw out the door!
If we ask for a show of hands for all those who have dealt with financial difficulties before, it’s safe to assume that almost every single person reading this will mentally raise their hands. Why? Because let’s face it, financial dilemmas are common, and we’ve all had our fair share of trouble. Whether your paycheck didn’t last till the end of the month and you had to borrow some cash or you took the liberty of taking out money from your emergency fund to finance a not-really-an-emergency purchase, we’re not here to judge you. Truth is, we’ve all done it before.
But there are common financial mistakes many of us are dealing with concurrently and may not be aware. So, to keep yourself financially healthy and away from all the unnecessary financial drama, take a look at the most common financial mistakes the best of us are subjected to, and find out the ways to mitigate them below!
Living paycheck to paycheck
When you’re living paycheck to paycheck, you’re basically only accounting for the present. Not only are you struggling to make ends meet, but you’re also putting yourself in a compromising position should life bestow upon you one of its many undesirable surprises. Living in such a toxic cycle puts you in financial jeopardy, but it’s easy to turn things around if you know how. Whether through cutting down your expenses, managing your debt, or simply budgeting, breaking the cycle and adapting healthier financial habits is easier than you think if you’re brave enough to take the first step.
Impulsive spending
Sometimes, when your eyes feast upon some cash in your wallet, your feet get set on autopilot. And the next thing you know, you’re making a beeline towards some store to spend your money haphazardly on items you don’t even need. Or maybe, you got so tempted to buy a new pair of jeans, a witty sales offer, or the brand-new gadget that has quickly become the hype, and now your money is flying left and right.
Let’s halt everything for a moment, shall we? Before you pull out the cash from your wallet, give yourself some time to mull over the purchase. The truth is, 90% of the time, you’ll find it unnecessary at all.
Impulsive spending is a vicious cycle. If you don’t get the hang of it from the beginning, then you’re losing more than just cash. Our advice is for you to stay on a budget and allocate a limited amount of money for your purchases. When you spend your money wisely, you’ll also be saving on the side, which can ultimately help you finance important crucial purchases in the future.
Drowning in debt
The ugly truth about credit cards is that they’re mostly used as an ostentatious display. Many might acquire credit cards mainly for the purpose of flaunting them around. And you might feel a certain sense of satisfaction when you take out the card and pay for something, but let’s not forget that it’s a form of debt. There will come a time when you need to pay back every JOD you’ve taken out of the card, and if you’re late on paying your monthly instalments, then the interest rate is quite a hefty one. And if you don’t pay that too? You risk defaulting on your payments, and no one wants the headache that comes along with it. You need to use the card wisely. Don’t live your life in debt, know your limits, finance purchases you can afford to pay back instantly, and most importantly, pay back your instalments in full and on time!
Living on a whim
One of the biggest mistakes you can possibly make is going on with your life without a solid financial plan. Once your paycheck arrives, sure you may spend your money on essentials like rent, groceries, and your bills, but if you’re not sticking to a budget, then you may find yourself in too much trouble than it’s worth. Make your finances a top priority and organise where your money is going. Find out where you can cut short on your expenses, and allocate the money left towards your savings and emergency fund. You’ll be surprised to know that a little planning goes a long way.
Think carefully about your financial footprint and what you’re planning to do with your money. We all encounter financial hassles, but as long as you know the right steps to work your way around said troubles, then you’ll be saving yourself a lifetime of mental gymnastics while staying financially afloat.
