Avoid These Mistakes As Much As You Can
Money makes the world go around or so we are told. For most of us it is something that we have to spend an amazing amount of mental energy focusing on. We are always concerned that our money will be fleeting and leave us just as soon as it has come around. Scarcity is also a major concern that many of us must deal with as well. When the money is not there to pay for any of the basics, then we are in real trouble.
Today we want to take a look at some terrible money mistakes that you may be making and what you can do to avoid the same outcomes going forward. Hopefully by the end of this you will have a better understanding of some of the common pitfalls that many of us make with money and how you can recognize those before they consume your life.
Not Having An Emergency Fund
Always living paycheck to paycheck is a terrible way to struggle through life. A lot of people think that they have no choice but to do this, but that is not the truth either. There are choices that we all make along the way that lead us either towards wise financial choices or poor ones. We are the drivers of those vehicles.
One of the first things to do is establish an emergency fund. This is a pre-set amount of money that you will need to have set aside for when an unplanned emergency expense arises. Financial gurus such as Dave Ramsey tend to recommend in the neighborhood of one-thousand dollars as a good place to start with an emergency fund, but you can adjust that for your own needs. This is enough money that securing a financial emergency is something that you could do if the need arose.
Not Understanding Debt
Do you know the difference between good and bad debt? Believe it or not, there is one. There are some terrible types of debt such as credit cards and payday loans. These debts contain very high interest rates and do not contribute towards the consumer's wealth in any way. In fact, they are big negatives on the opportunity to build wealth as more and more of that potential is sucked away in the form of interest payments to those credit cards or payday loans.
Good types of debt would be things that help you build wealth over time. Think of student loans or a mortgage in this category. Those are good types of debt because they are moving towards something that will increase your wealth over time. Your mortgage contributes to a bigger bottom line for you, and your student loans obviously are good in the sense that they help you obtain a college degree which puts you on track for bigger and better things going forward.
Delaying Until Tomorrow What Could Be Done Today
Why do we all have a tendency to want to delay things that we do particularly feel like doing? Perhaps it is just a human thing that is impossible to get past, but it does seem like a lot of us are experts at delaying the things that are not so fun while we embrace with full force the things that are. Unfortunately, many fun things also have a price tag attached to them. As such, it is expensive to always put the things that we need to get done on the back burner. Instead, we should focus on taking care of our business now so that we can have a fun time later.
Not Thinking About The Future
As human beings we often plan things out in our minds in a way that only focuses on the near future. We do not necessarily spend the time that we ought to thinking about how the more distant future is also important. We don't like to think about saving for retirement when there is a big shinny television that we want to purchase today. That is the paradox of trying to be a good steward of the money that we have to take care of right now.
It is hard to break this cycle other than to have a frank conversation with ourselves about our priorities and which priorities are really being served when we behave in certain ways. Then and only then can we actually start to make some progress on our overall goals.
Not Looking For Bargains
A quick and easy way to save some money from time to time is simply to look for bargains. If you are legitimately shopping for things that you actually need and not just wants, then you should be able to find some bargains out there. Put another way, do not give up on looking for deals just because you don't feel like looking. There is potentially a lot of money on the table for you to save if you get serious about looking for those deals and making them yours. Once you have done that, then you are actually taking steps to do better with your money.
It is a long and winding road for most of to reach a more peaceful financial life. The important thing to remember is that you are not in it alone and that you can make changes for the better if you choose to do so.