Who does not dream of becoming wealthy? If you ask
people around you about their goal in life, many of
them would say that it is being rich or wealthy. The
reasons why people want to be wealthy vary from
person to person.
Whatever your ulterior motive is, if you want to be wealthy, there are tried and tested money mistakes – yes, money mistakes, that you must avoid. Here, we bring to you a list of seven money mistakes that all of us should shun.
1. Spending more than you earn: It sounds like common sense but it is not. If this money mistake was simple enough to avoid, nobody would be in a financial crisis. This is a deadly habit and can ultimately lead to total financial distress. To make matters worse, we now have credit cards and other facilities that make us spend more than our financial means. To curb the urge to spend more than what you earn, maintain abudget and then track it closely.
“Before you spend, earn.” ~–William A.
Ward
2. Buying things you do not need:
All of us want to show-off our success but remember,
wealthy people do not have to show if off. It shows
itself but if you are on your path to being wealthy,
don’t commit this money mistake. You should
definitely spend on things of your interest but do not
buy things solely for the purpose of impressing others,
who are sometimes, even those people that you do
not like at all.
“If you buy things you don’t need, soon you
will have to sell things you need.” ~ Warren
Buffet
3. Not facing your financial situation
You might ask me how making this mistake is even
possible but this is our defense mechanism. When we
are obese and don’t want to do any effort to lose
weight, we start avoiding the mirror.
Similarly, when we know that our money matters are
in bad shape and we are not ready to make an effort
to fix them, we avoid looking at the exact figures and
that makes matters even worse! We should put the
figures on a paper or on an excel sheet and look at
them very carefully. That’s the first step towards
dealing with your money troubles.
4. Not having a plan
Just like it is required for anything else, planning is an
absolute must for your financial goals. Your financial
goals can and must include your retirement plans,
planning to pay your debt as soon as possible and
creating investments no matter if your income is high
or low.
“Make sure you have a plan of your life in
your hand, and that includes the financial
plan and your mission.” ~ Manoj Arora
5. Relying on one income stream
Many of us live depend on a single income stream and
we are quite happy to get a pay cheque on a fixed
date. Even those of us, who run their own business or
are self-employed, usually rely on one channel of
income. This can lead to an absolute disaster. No
matter how steady or great that income is, if it runs
dry due to any problem, it can create huge financial
issues.
6. Not trying to increase your income
If somebody asks you today to save more, do you
automatically start thinking about expenses that you
can cut down?
Wrong approach.
The better approach is to try to increase your
income. Let’s assume that a person saves 25% of their
income, if the income increases, savings too will
automatically increase. However, always trying to cut
down on your expenses is not a very fruitful and long-
term strategy. If you leave too many things, it will
make you frustrated and you will not be able to
achieve your goal of being wealthy.
7. Prioritizing spending over saving
When we have a pressing need at present, we tend to
feel that we should fulfill that need and savings can
always be done later. This later won’t ever come
because your needs never end. Research chemist Neil
McCarthy started investing in the stock market at a
very young age. Today he has a net worth of about
$2.1 million. According to him what made all the
difference is this:
“If you wait to save out of what’s left over from your
salary, it’s not going to happen. Pay yourself first.”
If you want to be wealthy, there’s no easy route. Just
focus on your goals and face the current problems in a
realistic manner. Make sure you avoid these money
mistakes on your path to being wealthy and success
would be yours!!
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