Financial Mistakes You Can Work To Avoid

We all have fears.

Can you imagine thinking back 20 years and regretting some mistakes you made? It’s a horrible feeling, but countless people feel that despair every single day because of the poor financial mistakes they made. They can easily spiral out of control, causing them to live in a financial nightmare that they can’t dig themselves out of.

But you can change.

It’s not something that we would wish on anyone, so here are some poor financial habits that you need to stop as soon as possible before it haunts you forever.

Budgets

Budgeting is a simple way to ensure that you don’t overspend your money each month.

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A little extra meal or a bit of entertainment probably won’t hurt, but when you do it too often it will start to get to your head and cause you to lose sight of how much money you’re actually earning and spending.

Always budget and never lose track of your money.

What’s the Goal?

A big mistake that people often make is saving for the sake of saving.

If you’re saving money you need to identify a specific purpose, even if that purpose is simply to have emergency money for the future. For example, your financial goal could be to have $2,000 saved for car emergencies. Another goal could be to save enough so that your children can go to college, or being able to sustain yourself with two sources of income.

The important step is to identify a goal- and write it down.

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Literacy Is Key

There are many people who simply don’t understand financial terms, or fail to study them, in order to understand what kind of financial situation they’re in. You can only feign ignorance for so long, and you must take responsibility for your finances.

There will be no “oops I didn’t realize I had to pay tax” and no “I didn’t realize I needed should’ve saved this money” and so on. Financial literacy is an important skill to have, so take action to educate yourself.

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Investing Choices

Always have a plan for your money, especially if you’re investing.

There are people that end up having to sell structured settlement because they misjudged how much money it would return, or need an emergency sum of money because they neglected to save in the past.

Investments are important for building wealth and happiness, but there is always the possibility that you misplace your trust in your investments and end up losing a lot of your wealth due to poor decision-making.

Get the Discipline

Forgetting to budget, impulse buys and trying to stay trendy are very poor financial decisions to make. In fact, under half of all Americans actually spend less than they earn, meaning that many people overuse their credit cards, end up in debt and ultimately struggle to pull themselves out of a financial nightmare.

Get the discipline and avoid financial troubles.

Action Steps To Consider

 

• Create a budget, even if that budget is simply on notebook paper.
• Separate your expenses between fixed and variable, and take a hard look at your variable spending.
• Take steps to cut your variable expenses each month and put the amount you save into a separate savings account.

This post is for educational purposes only.

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

Co-Founder: accountinged.com

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/

(you tube channel) kenboydstl