We are just few days away from 2023 and it wont be nice to keep repeating money mistakes every year. It sets one back financially. I have seen people make these mistakes often and they still wonder why they struggle to meet financial goals. These money mistakes are costly and its time to look at them critically and turn a new leaf in the coming year.
So, I will be looking at the following money mistakes and how to avoid them:
- Not saving money
- Impulse buying
- Borrowing often
- Not making budgets
There are more, but lets take a quick look at how each of the above brings you down financially
1. Not Saving Money
Not saving money is a big money mistake many people make. The funny part is that some people believe they are saving money by simply putting it in an account from where they spend regularly. That shouldn't be counted as savings. You should have a separate savings account. This account is where you put away some money and have the discipline not to spend it. So your savings account should not be where you dip hands and make expenses.
Not having expenses will hurt you financially. Lack of savings can lead to borrowing to solve problems. Annual expenses with large budgets are usually done from your savings. Expenses like house rent, loan servicing and other periodic large spending.
Another advantage of having savings is that you are able to solve financial emergencies. Someone can suddenly fall sick or die, or some other emergencies might arise. So without having some savings, you will always struggle to balance your finances.
2. Impulse buying
You should not buy things because others are buying them. If you buy stuffs because there is a seasons promo or sales discount, or some other reasons other than your needs, that is impulse buying.
Advertisers are great at pushing you to spend money on things you do not really need. Maybe if you look at your house, you begin to see things you have rarely or never used since you bought them. That is the point. Only buy on budget. Purchase your needs first. Even with regards to your needs, you need to have opportunity cost - that is buy the most important needs first.
When you avoid impulse buying, you save a lot of money that should have been spent on unnecessary things. Buy what you need and have the financial self-discipline to say no to impulse buying.
3. Borrowing often
There are times and valid reasons to borrow. You can borrow money to fund your business or pay for some really dire emergencies. But then, we have seen people borrow money to buy a car, a smartphone or to fund some other expensive live styles. Some borrow money to travel and vacation - loans that accumulate interest.
So for me, borrowing should be avoided as much as possible. If one should borrow, it should not be for trivial matters. Borrowing must be the last option and should be for a great reason other than just to finance irrelevant lifestyles.
4. Not making budgets
Another money mistake to avoid in 2023 is just spending money without planning it. They call it budget. When you make a budget, it easy to track and plan your spending very effectively. It helps you avoid impulse buying which I mentioned earlier. You will not end up purchasing unnecessary things or spending on things you should not.
Another important reason to have a budget is that have something to save. When you make a budget and curtail your expenditure, you will have spare money to save because a budget will not give room to buy things that are not needed. So if you have not been making budgets this 2022, that is a costly money mistake. Try to do it in 2023.
Conclusion
Do not repeat your money mistakes of 2022 in 2023. You need to turn a new leaf and do things differently. Your finances will be better managed if you avoid the above four money mistakes
Hurray!!! I have powered 10,000 LEO
You know that today is the last powerup day for this year, and we have been waiting for this day!. First of all, I had to change 1,393 Hive to swap.hive, which I used to purchase 10,000 LEO.
