With a world on the seesaw of economic troubles it’s now more than ever a time to look at how to manage money. The good old days of easy credit are gone for now and people find themselves working far harder to earn income. Businesses too have to downsize and try new ways of generating capital and governments are squeezing people and businesses for every dime they can. That being said, the wary person needs to know what common money mistakes to avoid.
Money is what we trade by. Bills and coins represent a value and we use math to regulate it. If one is disorganized it stands to reason their money is too. Whether it’s bank accounts that go unwatched to tossed money in a shoe box, not keeping one’s money in order, knowing how much or where it is or not keeping notes can lead to disaster and confusion. Take the time to organize your life and not just your money but everything so that discipline and responsibility take the lead. Soon you’ll find the stress has gone and you’re thinking with fiscal responsibility.
9- Impulse Buying
That shiny car or those pretty dresses can sure put a hole in one’s pocket if not careful. Impulse buying is one of the worst enemies and money mistakes ever. Advertisers work on us day and night to get us to buy their goods and services and often we fall prey to the attractive and hypnotic advertising. From buying up far too many food items to too much cosmetics to even fancy and expensive tools, impulsive buying has trapped many. Instead make a list of everything you need and budget around that only. This way you won’t have the extra money at hand when that impulse hits you and soon you’ll learn to think before you buy.
8- The Other Guys Lawn
The old saying, “The grass is always greener on the other guy’s lawn.” means that people tend to look at what others have and not appreciate the good they themselves possess. Looking at the new car or new lawn furniture your neighbors have can often lead to impulsive acquisitions of more things that burn into the budget. Only to later find that the objects weren’t of real value at all. Paying attention to one’s own possessions and fixing them up is a better investment and mindset for sure.
7- Pipe Dreaming
Having money around means you can direct it to whatever you need and want. One major mistake is tossing good money out for bad. This means investing in things that aren’t on solid ground. Yes there are great investment deals out there but nowadays it appears there are more snake oil salesmen around than in the days of the wild west. Real estate scams, investment scams are all over the place and far too often people fall for these charlatans. Invest your money wisely in things you know about. Particularly in furthering your skills at your education and crafts. They always bring in a good return on investment.
6- Listening To Know-It-Alls
Nobody but you knows your economic situation with money more than you. It seems that whenever one comes into some money there’s always some know-it-all who adds their two cents worth of opinion into what you should do with your money. Good advice and constructive advice should not be shunned but what’s of greater value here is your own personal integrity so that your money is administered for what you first need and then want.
5- Not Budgeting
A budget isn’t just some slang word. It’s how one looks at acquisition and expenditures so as to keep balanced books. If you know a vital bill like a mortgage is due then don’t go haphazardly shopping and not keeping account of what you can and should spend. This doesn’t mean being a cheap miser but instead focuses on the smart way of being aware of what is real and what isn’t to avoid the pitfalls of coming up short on capital when you need it most.
Hoping has nothing to do with money. The time spent hoping some money will come your way is fruitless and absurd. You need to do something to earn or be given money and instead of wishful thinking one should be looking at the practical ways that money is acquired. Look at your present situation and how you’ve always acquired money. What were the steps taken? It may appear that money just fell from the sky but in truth something you did initiated its arrival. Be practical and realistic and that way your mind and skills will be focused properly.
3- Borrowing Money
Borrowing too much money is what has gotten the world into the mess it has. Sure there are emergencies and needs and although it is tougher now than ever to borrow money there still are some venues available. The problem with borrowing money is that most people don’t have a sane plan to pay it back and don’t look at how they got into the situation for needing money in the first place. Once a person looks at the reasons they’ll uncover what not to do from now on so they won’t need to borrow.
2- Lending Money
Now is not the time to start lending money if you’re hard up. If you’ve an abundance of capital that is another story but even then one must be cautious. The first mistake of lending money is the expectation that it will be paid back. The more foolish is to expect it will be paid back with interest. This type of lending has ruined entire civilizations so you can see what it can do to a single person. If you’re going to lend money, don’t. Give it away. That way your mind will be on generating and managing capital now wondering where it is you’ve delegated to and if it will return.
1- Not Checking Stats
Your statistics are a signpost for what your money is doing and why. Even if you’re not a huge Wall St. mogul, you need to keep statistics so that you can make an evaluation, a sane and solid evaluation of what you’re doing with your money and what it is doing for you. Making a graph or using some of the available software for keeping statistics is easy and free in most cases. Make sure you know how much is coming in and from where. How it was acquired and expenditures. Taxes, bills, food, gasoline, all these things must be categorized so that at a glance you’ll be able to tell what is what. Without sound statistics you’re just asking for trouble.