SIMPLE money mistakes can have serious consequences. Some people seem to prefer to fail first before changing their approach, but that can be an expensive way to learn because over time they really compound.
Here are outlined three common financial mistakes. If they hit a bit close to home, maybe it’s time to make some money management changes.
NOT HAVING A BUDGET
Whether you earn $30,000 a year or $300,000, it’s crucial to have a clear understanding of how much money is coming in, going out and what’s left over to save, invest or pay off debt.
If you don’t have a budget, start one today. And while you’re at it, set some financial goals for the next few months.
It won’t take very long to put together and you’ll soon be making smarter, more informed decisions about your money. And if it all sounds too hard maybe you need the help of a smart mortgage broker to help you setup a smart money management system to help you get ahead
LIVING BEYOND YOUR MEANS
With credit cards readily available and so many temptations in our busy day-to-day lives, it’s easy to get carried away wanting everything at once.
But the fact is sooner or later living the high life will catch up with you.
If you’re racking up debt you can’t pay back, it’s time to have a serious think about things to compromise or sacrifice to get back into the black.
TREATING INVESTING LIKE GAMBLING
As with the casino, people hoping to make a fast buck speculating on the share market will be sadly mistaken.
Common traps include borrowing too much to invest, putting all your money on ‘the next big thing’, and having a short term outlook.
Investing isn’t a matter of choosing red or black. It involves taking long term positions in assets you understand and enlisting professional help to guide your decisions, using leveraging smartly like in property and understanding the cashflow requirements of those investment decisions.