(ThyBlackMan.com) Whether you have $1000 or $10,000 to start with, you won’t be able to build personal wealth without financial literacy. This is why many lottery winners often struggle to make the most of their winnings and end up blowing it.
As far as personal finances are concerned, what matters most is how you deploy your income, not how much you earn. In this post, we’re summarizing some common habits that put people in a weak financial standing.
Are you going through life with no knowledge of where and how you’re spending your hard-earned money?
You cannot control your financial future without tracking and managing your everyday spending. Start by making a budget and tracking your expenses. It will help you discover where you can cut back and enjoy savings.
If you’re facing financial struggles, then there is no better time than now to act. Just waiting around for the situation to improve is not an option, as it may just get worse.
Daily morning coffees, frequently eating out and partying every weekend are some ways you’re spending excessively. These might seem like a small expense, but in reality, they consume a major chunk of your paycheck.
Instead, get a coffee machine, start cooking and enjoying night-ins. This will make a difference to your finances.
Do you often miss payment due dates? Not only are you paying easily avoidable late fines, but you are also damaging your credit score. A good credit score determines your ability to borrow in the future. At times, even landlords review credit scores before renting their property.
Therefore, you should be on top of paying your bills on time. Set up a reminder on your phone to never miss a payment again. Also, if you’re short on cash, then consider taking out fast cash loans.
Living paycheck to paycheck
Living paycheck to paycheck is neither fun nor a financially sustainable way to live. In order to break the cycle, look for a part-time job to increase your income. The additional income will give you some breathing room.
Money has the ability to make more money. So instead of sticking all your savings in a bank, start investing. However, don’t rely on a random person you met at a party to make your investment decisions. Educate yourself and find the most suitable options that match your financial goals.
It seems like every day there is a new streaming service released. But this doesn’t mean you have to purchase its subscriptions. Keep your subscriptions to a minimum. And get rid of your cable, who watches television anyway?
Not having an emergency fund
While investing is a smart move, don’t make the mistake of investing the entirety of your savings. Keep aside a portion of your savings as an emergency fund. If things start to go haywire, you should have a financial safety net to fall back on.
Overpaying for essentials
Things like electricity, water and toiletries are essentials, but that doesn’t mean you have to pay full price for them. Always be on the lookout for discounted products and utility plans.
It’s good to be generous with your money, but not when it comes at the cost of your financial stability. Before lending money to your friends and family, you may want to discuss the repayment plan. Also, you should refrain from lending to people you barely know or don’t have a close relationship with.
The Bottom Line
Regardless of which economic profile you fall under, a secure financial future isn’t an unattainable dream. By breaking the habits, it’s possible to leave your money woes behind.
Staff Writer; Larry Jones