Money mistakes to avoid for growing your financial wealth
By Surihe Gaomas-Guchu
Standard Bank’s PR and Communication’s Manager
Having control over your finances and being able to grow your wealth annually can be liberating, however, if you keep making mistakes that bleed your pocket that can be hard to do.
As most people were mapping out their 2018 New Year’s resolutions, I am certain they were also mapping out their financial resolutions for the year.
Unfortunately, they are now finding that they have not been able to live up to those resolutions as we halfway through the year already.
Owing to this, advice on how to handle ones money can never get old, especially when people keep making the same financial mistakes.
It is not too late to catch-up to your financial goals, granted that you immediately eliminate the most common mistakes that people make when it comes to how they handle their finances.
Here are some of the mistakes that people make and how to avoid them:
1. Not having a financial goal:
It is impossible to create lasting wealth without having clear financial goals of what you want and how you plan to get there. Making a mental note of your financial goals is not enough, you need to write them down and commit yourself to it.
2. Depending on only one source of income:
Your salary may not be enough to help you build lasting wealth. You can make that salary start working actively for you by using a chunk of it to make investments that will create dependable streams of income flows for you e.g. start a small business or invest in mutual funds.
3. No Retirement Savings Account:
This is the year you should fix this mistake. You’re never too young to start saving for your retirement and the earlier you start saving, the better your quality of living when you retire.
4. Spending without a budget:
If sticking to your budget is not one of your New Year resolutions, you need to make it one. A budget is an itemized estimate of your expected income and expenses over a given period of time. The main reason to budget is to help you keep your finances under control by keeping track of how much money you are spending and where it is going.
5. Investing without researching:
Cardinal rule – before you make any investment of any sort, do your research first. Do not depend solely on the sales messaging. Go out of your way to do your own research and get proof that the investment you are about to make is likely to be profitable.
6. Failing to Set an Aside Emergency Fund
It is shocking to know that most people have no emergency savings despite the importance and urgency of having one.
A rainy-day fund is crucial in a one’s life – regardless of status and age – as it gives you peace of mind in any circumstance. When a rainy day comes, you have a breathing space for unforeseen expenses and you won’t have to succumb to debts.