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When it comes to finances, not everyone is as savvy as they would like to think that they are. We believe that when more people are made aware of common money mistakes, they would be better aware of how to avoid them.
In light of that thought, we wanted to discuss a few of the more common money mistakes that people tend to make with their finances. Mistakes like:
Not Having a Budget
Everyone needs a budget. Everyone can benefit from a budget. When it comes to spending, knowing how much you CAN actually spend versus what you WANT to spend is a great way to stay on the safe side of things.
When you do not have a budget you leave yourself and your finances wide open to sudden spending and coming short when you really shouldn’t.
Spending Based on Assumed Money
Let us explain this one. A lot of people tend to pre-order or actually buy stuff thinking that they can afford something because they’ve got money coming in. So basically, they’re spending money that they don’t have yet which is worse than charging something on a credit card.
When you spend money you only think you have as opposed to money you ACTUALLY have, you set yourself up for a lot of financial trouble.
Piling on Regular Expenses
There are certain things in your life that will always come with necessary cost. These of course refer to food, shelter, utilities and medicine. These are the most basic expenditures that you will have. The trouble is that since those needs are being met, a lot of people tend to pile on so many other expenditures.
We’re talking about gym memberships, Netflix, designer coffee, and even vacations. Having these unnecessary expenses can really catch you unaware. One moment you think you have a lot of extra cash then you blink and there’s a big of bills waiting for you.
Not Having Secondary Source of Income
A lot of people tend to only have a single source of income for everything and they end up feeling like they need to work 50 years in order to afford everything that they need. Any smart consumer will try to look for a secondary source of income.
Those that do not look for this end up having to live from paycheck to paycheck and that really sucks. Everyone makes money mistakes—this much is true. However, it is what you do with those mistakes that define your financial health and progress. If you haven’t made any of your own financial mistakes, we highly suggest that you read up on the mistakes that other people have made. Use their experiences to pad your knowledge on how to navigate finances.
There are a lot of different mistakes people make with their money. What common mistakes have you come across?