As humans, it is natural for us to make mistakes. However, like I mentioned in my previous article, some mistakes have debilitating effects and should be avoided at all cost.
“The sad thing is many people learn how to manage money after they’ve made a lot of financial mistakes, some that take decades to fix.” — Michelle Singletary
People often think that the mistakes with the most damaging consequences are the big ones. However, that is not always the case. Little mistakes could also have serious effects. In fact, I dare say “little mistakes” are the most dangerous ones to make, as they could easily become habits.
Today, I’ll be sharing 3 More Money Mistakes You Must Avoid at all costs:
1. Lack Of Emergency Funds
Let’s face it, life does not always go as planned; unexpected events such as illness, job loss, or accidents may necessitate immediate access to funds. The lack of emergency funds could put you in a precarious situation, pressuring you to make hasty financial decisions such as obtaining unfavorable loans or participating in distress sales. I understand that sometimes the difficulties you face seem overwhelming, but having emergency funds gives you a fighting chance and may reduce the severity of the issue.
“An emergency fund turns a crisis into an inconvenience.” – Dave Ramsey
This is why it is necessary to ensure that you make provision for emergency funds in your budget.
2. Spending/Lending Money Kept In Your Custody
It’s quite tempting to lend or spend money kept in your custody, especially when an emergency occurs and you lack funds. Regardless of how tempting it may seem, you should never spend money that has been placed in your care because it is not yours. Doing so could result in serious consequences, such as imprisonment. – People do not play with their money. You may assume that you will be able to replace it before anyone notices, but what happens if you don’t? Apart from your credibility being jeopardized, you would be under financial pressure and might make poor financial decisions.
2. Following Get-Rich-Quick Schemes
“Get-rich-quick schemes are for the lazy & unambitious. Respect your dreams enough to pay the full price for them.” – Steve Maraboli
There are no shortcuts to financial freedom. Building wealth is a process that takes time and discipline. One of the surest ways of losing your money is by participating in “Get Rich Quick” schemes. Get rich quick schemes include things like Ponzi schemes, pyramid schemes, and make money overnight offers. As the saying goes, “quick money brings quick problems.” Following a money scheme is bound to get you in trouble. When you invest in these schemes, you are only building wealth for the originators. Rather than participating in these schemes, channel your resources to well researched and guided investments.
Avoiding money mistakes and attaining financial freedom in general requires discipline and determination. You have the ability to achieve whatever you set your mind on, but you must be ready to do the work. Monitor your expenses, live within your means, save and invest and in no time, you will begin to notice a difference in your finances.
“It’s time to put an end to bad money habits. No matter how much you make, you can’t out-earn your mistakes. ” – Dave Ramsey
Remember, You Have Only One Life To Live, Make It Count!