7 Money Mistakes People Made

Everyone dreams to make more money. There’s nothing wrong in making more money.
But what happens when people had made money. How do they spend?
There is a huge difference between getting rich and staying rich.
Let’s see some stats.

75% of American teens lack knowledge in their personal finance.
25% of Americans say they don’t have anyone they can ask for trusted financial guidance.
78% of Adults ages between 18 to 29 have credit card debt, that’s over 90 days overdue.
2 in 3 families lack an emergency fund.
4 in 5 youths failed a financial literacy quiz.

So there is a much lack of knowledge in managing finances.
In this article I am sharing 7 Money Mistakes people often do, that you should avoid. Stay Tight!

1. You spend more than you earn.
Yeah this is a valid mistake. You have to spend money that you earn, that you have. You don’t have to spend the money from your credit card. Always spend the money that you do have. No matter the amount is big or small, but you just have to spend less than you earn.
You have to do some math for your personal finance at the end of month. See your expenses, see your earnings and if you are spending more than you earn, then you really need to focus. The best way to reduce this is to write your every spending, and think what thing was not necessary to buy. This will takes some time, but it will help you in the long run.

2. You live on borrowed money:
Credit card debts are just like Home loans, car loans etc. Banks love when you do not pay your credit card. These are the bank’s products to make money. Because at the end they will take it from you. And you will pay much higher than you have borrowed, that’s the dangerous thing you should avoid. The goal is to live below your means.

3. Not financially planing for future:
You are not planing for your future. You spend more than you earned or spend all the money that you make. There’s no plan for your retirement. Because when you will get old, you’ll have nothing. You still have to work. So it’s better to plan for worse. Because everyone gets old, everyone dies.
Always invest in your future.

4. You allow the lifestyle creep to occur:
Often people think that when they earn more money, they have to increase their life style. Because they are not focusing on them, they are focusing on social media. Many people that you see having good lifestyle, use credit cards and spending more than they have. So you don’t have to follow them. I am not saying that don’t spend money on things like vacations, no definitely not. Instead set your budget for your vacations, shopping and set according to your income. Always save some money, and live on less than money that you total earned.

5. You take shortcuts:
Now you have made some money and want’s to get rich fast as possible. And now you think you are genius, put my money to work for me. People often invest in stocks and in crypto, but these are not easy things to do. You invest money and then the stocks fell, and the person who have not experience of these things will be afraid sell and loose much more money. So it’s important to double check, do your proper research, and invest the money that you don’t care too much.
Make your personal investment strategy and stays on it. No matter what the market is doing, but you have to be precise.

6. You have only one source of income:
Often people are very comfortable in their 9 to 5 jobs. Because they want to live a comfortable life. They don’t want to break their comfort zones and it’s worse. Having only one source of income means, you are only step away from poverty. In the recent pandemic, so many people lost their jobs, and they don’t have much to live because they have lost their one job. They don’t know how to diversify their income. So think about making multiple source of income.

7. You prioritize for short term not the long term:
You plan for small happiness, small parties on weekends and waste your precious time. I know it’s important, but you have to prioritize your time. Focus on long term financial goals. Don’t buy or do things that you don’t want. Stay in a good circle, because if you stay in good circle, your friends will talk about money, business and eventually you will. Always plan for the long term. Save for your tomorrow.

Everyone’s rich definition is different, so figure out what you want and plan accordingly, but whatever your definition is, avoid these 7 mistakes.

Thanks for reading. Share your opinions below, I will love to hear from you.