5 Personal Finance Mistakes To Stop Making Today

If you want to make sure you’re living a comfortable, happy life, one of the most important things to get under control is your personal finances.

Some people claim to be ‘no good with money’, but really, this is just an excuse- so that they can avoid changing their habits.

The reason that people don’t diet, don’t exercise, and don’t resolve bad personal relationships is that change is hard. As a result, we don’t really, truly change and grow unless we’re in real pain. When we’re at that point, the pain of change is less severe than that pain of not changing.

Having new things can be exciting for a while, but it doesn’t take long for them to lose the feeling that those items originally provided, and this leaves people wanting to buy even more stuff to get the feeling back. Recognizing these types of habits is important, in order to get back on track financially

Here are 5 personal finance mistakes to stop making today, so you can start to feel confident and comfortable managing your money:

 

Do You Budget?

 

If you don’t have a budget in place, you’re likely spending your money all over the place without really knowing how much you’re spending, or what you’re spending it on.

 

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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.

 

Saving What’s Left (or not saving at all)

 

The biggest mistake you can make is saving what’s left after you’re done spending.

 

Oftentimes, this means you’re not saving at all. Many people don’t bother, and this is how they get into debt. You should save first, making it a non-negotiable part of your week/month.

 

Set up an automatic payment so you don’t even need to think about it. You never know when you might encounter a potentially costly emergency, such as having to hire a personal injury attorney or replace a broken boiler.

Saving $1 per day can be a great starting point, and you can bump it up as you feel comfortable.

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What About Real Assets?

 

Cars and other purchases aren’t investment assets. They drain your money, rather than helping you to make more of it. Instead, you should look into investing in real assets, such as stocks, bonds, and real estate.

 

This is the only real way you can begin building wealth in the long term, so look into it if you want to protect your money and future.

 

The Evils of Debt

 

Spending money you haven’t got isn’t a smart move. Interest rates can be high, and people often get into debt over things that they don’t really need. Avoid borrowing money – your emergency fund and budget should help you to do this.

 

Keeping Up With Your Social Group

 

Just because your social group has expensive luxury items doesn’t mean you need them.

 

They might look like they are living in luxury, but in reality, unless you know they are very wealthy, they are likely in lots of debt, having to pay off things like cars and phones each month. Bear this in mind and you’ll be happier in the long run!

 

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