Money Mistakes. Learn about the most common and worst mistakes with money people make and what you can do to avoid them.
Common Money Mistakes
1. Spending money you do not have
Many people count on future earnings to pay present debt. They are convinced that their paychecks would increase over time, and therefore fall into the trap of always wanting more. They want something bigger, shinier, newer, and do not hesitate to charge everything to their credit cards – thinking that they can certainly pay it off in the future.
2. Spending to impress
Buying that Louis Vuitton handbag to impress your colleagues, taking a cab everywhere. Some people judge themselves by the way others see them. They are determined to create a false image of affluence, regardless of what it takes.
3. Wasting money
Late and missed payments, library fines – these expenditures can all be avoided easily.
At the same time, we all too often buy things that we do not need. We all have our pet peeves: books, electronic gadgets, CDs, handbags, clothes. How many times have you thrown away something years later, only to realize that it is almost brand new and that you have almost never used it before?
4. Spending money subconsciously
Many people give themselves the excuse, “I’m too busy to deal with money”. They see those who keep tabs of their money closely as ‘cheapskates’. Yet, it is very important to monitor your income and expenses. Know exactly where each dollar went to, so that you can then adjust your spending habits accordingly.
5. Aimless financial lives
One of the worst mistakes people make with money: they fail to set goals. They are content to let life just pass by, living by the day. Conversely, if you were to tell yourself that you want to purchase your first house by 22 or make your first million by 25, these financial goals would empower you on both the conscious and the subconscious levels.
With these goals in mind, your actions and behavior would be much better aligned to your goals, such that such action you take would naturally move you one step closer toward your goals.
6. Expensive leisure activities
It is perfectly fine to take a break from work. But most adults in their twenties equate leisure with nonstop clubbing and other expensive forms of entertainment. Blowing $100 every Saturday night adds up quickly; waking up in the afternoon every Sunday with a massive hangover doesn’t help either.
Yet, there are many forms of leisure that are free and perhaps much more refreshing for the mind: a game of basketball, a walk along the beach, classes at the local community centre, among many others