If I ask “Do you make any spending mistake?” I’m sure no one will be able to answer “No”. More or less we all make or have made money mistakes in our lifetime – some of which we do knowingly and the rest unknowingly. However, if we can be a little conscious, we can avoid making these mistakes. So, in this financial literacy month, I thought of sharing with you some money mistakes we do and how you can rectify them.
You have the habit of spending money you don’t have
Have you ever thought this while swiping your credit card? Perhaps ‘No’. Just think a bit! Do you actually have the money? If yes, then make sure you pay every cent at the end of every billing cycle and not revolve the balance from one billing cycle to another
Not planing and following a realistic budget
This is a point I keep saying repeatedly. Because, this is the most essential aspect of managing personal finance. If you cannot plan a realistic budget, you’ll never be able to forecast how much you can spend on each category and eventually end up spending more without even realizing where your money is going.
Not considering certain non-monthly expenses
There are certain expenses on which we spend quite a significant amount but we don’t consider them in our monthly budget since they’re non-monthly expenses. For example, how many of you consider vacation spending while planning a budget? However, it is much easier to fit it into a monthly budget. How can you do it? It’s very simple. Suppose you’re planning a vacation during the Christmas holidays. Make a plan and divide the amount by 12, so that you can set aside the amount every month. Doing so, you’ll also not fall into holiday debt. Find out, which other lump sum expenses can you break into monthly expenses?
Subscribing to each and every item you come across
How many times have you hit the subscription button received in your mails? If you remember (which is difficult if you have a lot of subscription), go through them again to find out how much you’re paying monthly and whether or not some of them have increased the rate. The trial free version doesn’t continue for long.
At the end of the month, saving the dollars you didn’t use
More or less everyone do this at least in some months, when we don’t feel like planning a suitable budget. . We save the amount which is left at the end of the month. However, if you do so, there’ll be some months in which you won’t save anything. Therefore, follow the strategy of setting aside the amount you want to save and plan your month with the remaining amount. This way, you’ll be able to save a definite amount every month.
Not involving yourself in everyday financial matters
Do you like to pass the responsibility of managing finances, to your spouse? It usually happens that he/she looks after the finances who earns more or the one who enjoys dealing with financial matters, more. However, this is a wrong practice. It is always better to discuss and make the financial decisions together so that both of you can work towards fulfilling your financial goals.
We don’t change our habits
We want to change our situation but rarely we take a step forward. For example, if you aren’t satisfied with the salary you’re getting from your job, take the initiative and try to change your job. There are small changes in life which we can adopt without having to try much. Bigger changes are comparatively difficult to adopt. So, start with making small changes which will have significant effects in your financial life.
Feel free if you want to highlight any other spending mistakes which you think is very common.