In a world where prices are rising, and the internet is like air, sustaining your rich goals could be quite a struggle. You have daily needs to meet up amidst many personal necessities, and you try to make a few money mistakes as possible.
Most of your money mistakes happen on your phone. When you try to unwind from all the hustle, you pick up your phone and fall into temptation. Even when you are not trying to unwind, you are most likely on your phone. As interesting and informative as the internet may be, social media, especially, has its fair share of pressure. There’s the pressure to meet your financial goals as quickly as possible, and there’s the one to spend as lavishly as you can imagine.
This article will dissect some of the money mistakes you may be making. It will also help provide a relatively effective solution to meeting your financial goals.
6 Money Mistakes You Should Stop Making to Get Financial Freedom
Spending before saving
Of all the money mistakes, everybody falls guilty of this one at one point or the other. This is not necessarily a personal problem – although it can become one if there is no significant effort to change. Instead, it is a situational issue.
For instance, you intend to save a particular sum of money monthly, but you end up spending your income on various expenses before you save. You realise you have no savings to be proud of at the end of the month. This can be very annoying and exhausting, especially when you snuck in some ‘you only live once’ kind of spending. At that point, you regret and wish you had just been saved from the start.
A major path to financial freedom and attaining money goals is having the ability to save. How can you become rich when you literally spend all the money you ever get? You’ll probably become rich in ‘Sapa’ (a Nigerian term used in expressing a state of being broke).
One fundamental saving principle from financial philosophers is to save before spending. That is, whenever you get your income, take out a certain percentage towards your savings. For example, if your financial goal for the year is to be #24,000 richer, all you have to do is save at least #2000 monthly. Why not exactly #2,000? Saving more would not only help you attain your rich goal faster but also exceed it. This brings you a step closer to financial freedom. So, if you can afford to save more than planned, please use that opportunity.
Read also: How to cultivate money-saving habits
Poor money management
A famous saying goes, ‘if you fail to plan, you plan to fail.’ Bringing that down to attaining rich goals and avoiding money mistakes, if you do not plan your income and tend to squander it quickly, it probably means you don’t understand the need to manage it. You claim to want to attain financial freedom, but you cannot manage your income.
Poor management is one of the money mistakes that many people make consistently. You’re always surprised when you run out of cash. If you are in this situation and are unready to change, please strike out those rich goals, cause whattt?!
We have already highlighted and explained the importance of saving. But how do you even save when you cannot manage your income judiciously? Try to list all your wants and carefully pick out your actual needs. It would help you understand what to save for and how much to save. After doing this, you can tick off whatever is unnecessary to avoid stories of brokenness that touch. This truck helps you achieve a proper plan for your next income.
If you didn’t know, your poor money management is yours to solve. No one would share in your broke times except for words of condolences and maybe sprinkles of advice to uplift you. Take actionable steps to plan and control your income, not the other way around.
You don’t have a budget
This money management thing we are talking about all boils down to having a budget. Many times, people spend on impulse without checking if it’s necessary. Drawing out a budget helps you know what and when to spend your money. This is another money mistake people are making.
Imagine going to the market without a list; you’ll definitely come back with many things you didn’t intend to get. The inability to keep track of your expenses would not help you account for your money. The question of how much you spend on food, clothing, fun, and other things would have no answer because you don’t know.
Budgeting helps you know when and where your money goes. Did you know that not having a budget can create a financial mess that would most likely affect your rich goals and your entire life? A budget is a list that plans your estimated income and expenses for a particular period. You should prepare based on your income. It is the perfect tracker you need to ensure you are not going above your means in expenses.
If your income comes in monthly, you should plan your budget on that basis. If you are certain about your monthly income, you can use your monthly budget to even plan a yearly budget. Budgeting does not make you poor or infer that there is a scarcity in your life. It basically attests to your prudence in spending and your dedication to staying rich.
Read also: How to avoid impulse buying as a Nigerian
Inability to stick with your budget
Understanding the necessity of money management and having a budget is somewhat useless without actual implementation. You are still stuck on your impulse buying attitude, your ‘I can not come and go and die’ mentality, and maybe you’re trying to ‘look rich’ lifestyle. All these habits will eventually get you broke.
Sticking with your budget is pretty straightforward. All you need is self-discipline. You need to make a conscious decision not to be a victim of any of the money mistakes you know. Always avoid unnecessary expenses at all costs. You don’t have to wear the latest clothes or own a car if you cannot afford it. Unpopular opinion: a car is a liability.
Once you restructure your mentality, you’ll find it easy to stick with your budget and abstain from many money mistakes. Attaining financial stability and meeting your money goals start with sticking to that budget. That’s the easiest money management technique.
Read also: How to build self-discipline as a Nigerian
You lack an emergency fund
How do you plan to stay rich without having an emergency fund? I mean, do you allow yourself to get stranded when issues arise? Note now that your savings is not and shouldn’t be your emergency fund. That’s not a rich goal but a big-time error in avoiding money mistakes. This is Nigerian life, and things are bound to happen.
Crazy and unpleasant things! Household hazards, transportation hikes, you name it, anything and everything is possible. Your ability to handle these problems as they come differentiates you from a person mismanaging their income.
Imagine being in funny situations with no form of help from anyone. How do you get out of such a fix without an emergency fund? In cases like this, people mostly run into debts by taking loans, which downsizes their financial state. Having an emergency fund is pretty easy and extremely necessary. Discipline yourself enough to take out money from your income towards it.
Of course, we can’t all be crypto or Forex traders, but one thing is certain. There is a form of investment for everyone. Investments are a sustainable way to increase your income. You can’t depend solely on savings because it doesn’t actively increase your revenue. Every rich person wants to stay rich and get richer. Trust investments to do that for you.
Investing in excellent but try to know the nitty-gritty of your investment path before putting in money. A lot of scams have been successful through investments. Don’t be a victim. If the offer seems too good to be true, it most likely is a scam, so walk away. You can go to investment professionals to help you make the best decision.
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We have all made one or more of these money mistakes, but we need to be financially stable is still persistent. Nobody loves to get stranded when it’s time to sort out their issues. Attaining your rich goals and financial freedom might be difficult, but discipline and motivation would do the process.
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