I think you’d agree with me when I say one of the basic goals of anyone on earth is to be financially stable and live a fulfilled life, but it is very unfortunate that only few people are able to achieve it. Making financial mistakes can be costly at times, it may lead to financial stagnancy or economic hardship, with just few days left to begin the New Year 2019, it is crucial to highlight some of the common financial mistakes people make so as to avoid such in the much anticipated New Year. Even if you are already facing some financial difficulties, avoiding these mistakes could make you survive it and bounce back!
Here are 8 financial mistakes you must avoid in 2019
Mistake No. 8 : Living an expensive lifestyle
A lot of people are victim of this, living beyond your means is a financial mistake that must be corrected in the coming year. Expensive lifestyle is very difficult to maintain, it requires spending heavily and you may end up borrowing money from people so as to continue living large. Don’t forget that the more you borrow, the more your debt grows, and incurring debt is very bad for you because your focus would be on how to raise money to pay off the debt rather than your financial achievements. Stop buying cars, clothes, phones and other items that make you spend more than your current earnings, spend wisely in 2019!
Mistake No. 7 : Spending money on an item that you can do without
Before buying anything, always ask yourself “What will I lose if I don’t buy this item?” if the answer is not strong enough, drop it and keep your money for future use!
Mistake No. 6: Taking ‘uncalculated risk’
According to the popular Scholar F. Knight, there are two types of risks, namely: calculable and incalculable risks. Calculable risks are risks that the outcome can be predicted while incalculable risks are risks that are unpredictable or uncertain. It is very good to take investment and business risks but make sure you assess the risk properly before taking it, if the outcome is not certain then it is not worth taking.
Mistake No. 5: Waiting to invest
Another common financial mistake people make is waiting until they have huge amount of money before investing, you need not to do so, the best time to start investing is now. No matter how small your income is always set aside some money for investment purpose. The earlier you start investing, the faster you’ll be able to achieve your financial goals.
Mistake No. 4: Saving what is left after spending
For you to have a fulfilled financial life, make sure you spend what is left after saving and not the other way round. A popular adage says “if you love to buy things you don’t need, you will soon start selling what you have to get what you need.”
Mistake No. 3: Keeping your seed instead of planting it
In a bid to prevent financial meltdown, a lot of people save their money at the bank, the bitter truth is that it is very difficult to maintain your lifestyle and achieve your financial goals by just saving. Money is like a seed, if you don’t plant it, it will soon begin to die (caused by inflation and some other factors). Learn to put your money in the right investment portfolio.
Mistake No. 2: Keeping money near your reach
If you have money that you don’t intend to use in the short term, make sure you keep it out of reach. When you begin to walk around with the money you don’t really need there is high tendency that you will overspend and waste such money on irrelevancies. For instance taking out N50k in your wallet when your plan was to actually spend N15k in the market.
Mistake No. 1: Not Having a Financial Plan
As it is usually said “Proper Planning Prevents Poor Performance.” It is very unfortunate that billions of people spend hours watching TV and chatting on social networks, but find it difficult to set aside few hours for financial planning. Your financial future is a function of what is going on right now. To have a financial hassle-free year, it is very crucial you know where you are and where you are going. No matter the amount of money you have, you will soon exhaust it if you don’t plan well. Have you heard the story of multimillionaires who later went broke in life? Lack of financial planning is one of the basic reasons! So, don’t fall victim of this common financial mistake, make it a habit to always plan your finance before spending a dime. You will reap the benefits if you can abide.