Financial mistakes you’d better leave in the past

How to pave the way to a million and stop trying to make ends meet? Let’s do some gap analysis!

Many people are daydreaming of how they would deal with a couple of millions if they inherited a fortune from some distant rich relative. But they don’t understand that the same mistakes that prevent them from making their own fortune may occur.

1. Buying unnecessary things

This is especially promoted by vivid and colorful advertising which artificially creates a desire to buy something that you do not really need or even can’t afford. All this involves us in an endless race for a new phone model or a rejuvenating cream promoted by another Insta-celebrity, which come at a price. Prioritize and reasonably assess your capabilities and needs.

2. Debt accumulation

In modern world, it's easy to take out a loan. Many people abuse this idea, getting involved in difficult relations with banks and credit institutions. In countries where credit cards are popular, the story is even worse: many live their entire lives in debt and with a negative balance. What a great legacy for descendants, isn’t it? Loans tend to accumulate, and creditors' patience is not eternal. Be responsible in distributing finances and beware of using other’s money!

3. Lack of savings

Surprisingly, at least 60% of people admit that they have absolutely no savings. They spend all they earn not keeping even a small share of income on a rainy day. The danger is that they not only can’t take advantage of some unexpected opportunities, but also cope with sudden troubles. At least 10% of the earned funds must be stored to get out of the whirlpool of “I-tend-to-spend”.

4. Emotion-based financial decisions

We often get hooked by marketers who stimulate our feelings or instincts, forcing us to make a spontaneous purchase. Before you make an unplanned purchase of some good, think: do you really need it? Turn off the feelings, turn on the logic and realize what motivates you in your decision to buy this item. Is there no rational explanation or are you starting to make excuses on the go? Put it back on the shelf, you don’t need it.

5. No pension plan

Of course, it seems that old age is far away and "everything will change so much that it hardly makes sense now to take care of it." Wrong! Lay the foundation for a happy retirement when you are young so that not to get broke at the dawn of your life and become a burden to relatives. Plan your future in advance!

Perhaps some of your friends also live from salary to salary and don’t know how to escape it? Share this article with them, give a helping hand: there will be no better moment to do it!

Read more:

You may also like

No comments:

Powered by Blogger.