The reasons for erroneous behavior with money are most often a lack of knowledge in the field of personal finance or upbringing. It can be difficult to get rid of these mistakes and succeed in financial matters, even with a good financial plan and the noblest intentions. For example, when you have debts or loans, but you continue to spend money on travel, expensive clothes and other joys of life, then you will get out of them. It will be good if they do not tighten you even more. In this article, we will talk about the mistakes that people make most often when dealing with their finances, and how you can avoid them.
Impulsive spending
Everyone goes shopping and shopping, but for some, shopping turns into a means by which they cope with stress, with life’s ups and downs. In fact, impulsive spending only makes things much more complicated. During an impulse purchase, there is a temporary rise in mood and a surge of energy. But as soon as you begin to understand that you basically do not need the thing you bought, and the credit card is at zero, depression and devastation come to replace the rise.
If you set for yourself and follow some simple rules, you can avoid such purchases. Before going to the store for shopping, make a list of what you need to buy. Try, at least at first, not to take a credit card or a large amount of money with you. Take enough money to buy from the list. So even if there is a desire to purchase something in addition to the list, you simply will not have money for it. On the way home, you will have the opportunity to rethink the need for this thing, and if it is really so important to you, return to the store and buy it. But, as practice shows, this happens extremely rarely.
Now, in order to attract customers with various discounts and promotions, many large supermarkets and retail chains make email newsletters. Unsubscribe from them. Now there is no shortage of goods, there is a shortage of buyers. Therefore, if you really need some thing, you will go and buy it without their mailings.
Money not only needs to be earned, you need to learn how to properly manage your capital. Everyone makes up the rules for himself.
Lend
It probably happened historically for us – it’s easy to lend money to a neighbor before payday, to a friend to buy some thing. But these are different times. Jobs are precarious, and inflation devalues money. If yesterday it was possible to buy some valuable thing for them, then tomorrow you will have to pay more for the same thing. No one argues that helping friends or relatives is wonderful. But at the same time, you need to think about what damage you will cause to your budget, whether you are ready to part with this amount in case of unforeseen situations for those to whom you lent money. After all, anything can happen, you can lose both money and friends. Well, if you still decide to lend money, then learn to perceive it as a gift. Then there will be no resentment and disappointment. If you can’t afford to make such a gift, don’t borrow it.
Always pay the bill
Some people like to flaunt the fact that they have money and are financially wealthy. They pay bills in restaurants for friends’ dinners or treat the company with drinks, while they may not think that this money from the family budget was intended for some more important expenses. Friends quickly get used to this and expect such behavior from him in the future. As soon as you stop paying the bill, the relationship begins to deteriorate. It becomes incomprehensible whether this person dined with you because he is your friend and he is pleased with your company, or because you paid for his dinner. Therefore, you need to make it a rule – everyone pays for himself according to the bill.
Compare your income with other people’s incomes
A flawed approach is to measure a person’s success by having a big house or a good car. They are not an indicator of a person’s money, but how he prefers to spend it. Remember that if a neighbor has an SUV, this does not mean that he does not have debts or loans. It is possible that he is living beyond his means.
Therefore, you need to decide what is important for you. Set a goal and adjust your spending with that goal in mind. But spending money to be no worse than a neighbor is at least unwise, if not stupid.
Do not save money from income
Every month, a person spends one part of his income on paying bills for an apartment and utilities, on buying food and basic necessities, and disposes of the other part at his discretion. His financial well-being depends on how he disposes of this second part. People make the biggest mistake when they spend all the money they earn, don’t save or make investments. In the event of unforeseen situations, they will not have free funds and will have to get into debt, and you just need to forget about a calm secure old age.
To avoid this, when planning a family budget, you need to lay down an expense item, which will be 10% of your salary. If you plan your expenses correctly, then it is quite possible to save money in this way. And in order to protect your savings from inflation, use a bank deposit account.
Ignoring reality
Don’t shy away from reality if something goes wrong and the bank accounts are empty. Problems will not go away on their own. They need to be decided, no matter how difficult and unpleasant it is. Do not dwell on the unpleasant events that have occurred, just be more prudent in the future. You should thoroughly analyze your loans, debts and liabilities and make a plan to solve the problem. Only by looking the truth in the eye can you solve the problem with your finances.
Tagged with: Personal Finance
