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7 Simple Financial Mistakes You Might be Doing Right Now

Mika Castro

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“How do I get rich?” Perhaps we’ve all asked ourselves this question once or twice. Whether we wanted some extra moolah to buy that car, property or afford some travel destinations and vacation, it seems like being rich is a prerequisite for all these things.

For most of us who are really keen on changing our fortunes, we may have read and tried numerous financial advice already. Often those financial advice will tell us the DOs and DON’Ts to getting rich. But how about those practices that we are ALREADY DOING that might be interfering with our goals to getting richer? Well read these financial mistakes you might be doing now, and you can try to avoid or correct them!

#1. YOLO-ing!

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Does this sound familiar to you? Using up to 30-50% of your annual paycheck savings to afford a grand cruise, or buy that luxury item just to escape the bitter realities of life, and then will go real broke after all the fun? Sure a little entertainment won't hurt. But know when is "little" actually "too much". Avoid the YOLO "You Only Live Once" mentality that some people do to frolic in life. Instead, you can use those resources you have saved on funding your dreams or investments. YOLO when you have the funds already to do so.

#2. Not investing on yourself

It's not just businesses that you can invest on really. The biggest investment you can make is actually yourself. Whether it be pursuing higher studies, garnering more training and experience, or simply practicing and enhancing a skill, invest on yourself. Identify which areas you think you can invest on. Maybe a secondary language, or programming? These skills can come in handy and there are a wide range of applications for such.

#3.Buying "cheap" and "imitation" products

Not that we are saying that all low cost products are low quality, but let's admit to the fact that most cheap products are inferior with their more expensive, well-made counterparts. Logically, cheaper priced or imitation goods also use cheaper materials thus the lower cost of manufacturing and selling them. Consider the long-term usage, such as buying for example a $100 shoe you can use for quite a few years, than a cheap one that you will replace every year, and drains more money than you realize. Think of the long-term practicality rather than a short-serving satisfaction you might regret later.

#4. Buying on credit

There is a saying that, you shouldn't pay for stuff with money that you don't have. Is it really necessary to buy those new wardrobe with the credit card? Or that new gadget? Are you sure this month’s groceries can’t be paid in cash? Always keep in mind that the reason credit card companies are very eager to lend you money is because they profit off from your interest. And if you can’t pay off those credit card debt in full, always remember that those interests siphon off more money from you! Credit card loans are like quicksand, the deeper you get in the harder it is to get out!

#5. Not saving and investing!

“Yay 14th month paycheck is in! Where do I spend it on?” “Got my bonus! Finally I can buy this and that!” Does these lines sound familiar to you? Are you one of those who would impulsively use up their savings for immediate gratification? Again, think ahead. Save up the money and invest, be it on bank savings, cooperative shares, stocks or your own business. Teach yourself some self-control. Don’t touch that money sitting idle in your bank account for no good reason! And if you will touch that money, make sure it is on an investment that will grow it.

#6. Mortgaging a home

Sure housing loans sound like a good idea to finally have that home sweet home. But you might want to rethink those transactions. Mortgaging a house entails re-financing, bills paying and of course add economic inflation to that equation and you end up paying higher than the original price. Rent until you can own, or once you saved enough, buy in straight cash!

#7. Opting for a traditional retirement

Source: toonpool.com

What is a traditional retirement you say? It is enslaving ourselves to our work until we retire and then we get all those retirement funds and pensions we all worked so hard for (and that is saying if you are lucky to have a regular job that you can keep until the bitter end). Thus, we end up working only to look forward to retiring! How about living in the moment and actually enjoying work and the fruits of our labor? The paradox of life is that, we have little money to spend on things we want while we are working, and after retirement we have so little time left to enjoy the money we have. The best thing to do is to build our fortune while young. Do not bank on your separation pay or retirement pay to become rich. Make money and grow it, and finally ENJOY AND SPEND MONEY YOU CAN SPARE!

What do you think of these money mistakes? Share these tips to your loved ones and avoid these financial mistakes.

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