Most of us are focused on making money, and what happens after that is not of much interest to us, some even go ahead to say money is meant for spending, not wrong to some extent, but can be gravely wrong when spent wrongly, the reason we keep fluctuating from rich to broke every now and then. There is one funny and annoying statement a neighbor of mine likes making when asked to pay his bills, and it goes like this, "I used to be rich", it doesn't stop there, he continues listing the properties he owned and the extravagant fun tome he had touring different night clubs in town, after all these throwback stories, he ends with he can't afford his bills at the moment, that it will be better for him again someday.
From his story, he was lucky to have a relative who gifted him a huge capital to start a business, selling of electronic appliances, the business had huge growth and then started making profits, as he was disciplined and focused on paying his uncle back after one year as they agreed upon, he led an humble lifestyle and after the first year due to the discipline and effort he put into the business, there was massive cash flow, upon the agreed repayment day, his uncle surprised him, saying he shouldn't pay him back as he wanted to know how serious he could handle his business, it was a huge shock for him, and his life turned around, he actually became a rich man, but he lacked in the area of managing money, even though he knew how to make it, he spent lavishly, feeling there was no end to the wealth of a business man who is doing well, but that he thought was wrong, by the end of the next year, his store became scanty and there was no money to replace the goods in the store, next, he got entangled with loan sharks which brought no improvement due to his bad money management skills, and today, the business is no more,and he is left in pile of debts, hiding out where he still can;t afford to pay his utility bills.
That is the story of my neighbour, but the truth I that some of us toll the same path in our way, we make money but still make lots of money mistakes which can be very costly, so in this post, I will be highlighting some money mistakes we make and also why we need to stop making these expensive mistakes.
1 No Budget, Plans, or Goals
You make money but don't know what the flow of your income compared to your expenses monthly for instance, this shouldn't be so, as monitoring your cash flow makes you aware when there is an incoming red alert, then you know how to make the necessary adjustment to avoid falling into financial crises, let's face the fact, how can you accomplish a goal without a set down budget and planning, you wish to buy a car for instance which would probably cost you saving a quarter of your monthly income for some period, how would you achieve this if you don't have a set down plan and budget to follow with discipline? Every income earner should learn to budget as it is an essential part of money management, no matter how low or high you think you earn, that shouldn't be an excuse, as budgeting is not limited to anyone.
2 Not saving for Emergencies
Our emergency funds save us in times of emergency, and these are situations that creep on us when we least expect them, no one looks forward to unfortunate incidents, but saving ahead, since we are all humans and don't have superpowers to warn us, its better to start saving now, so we don't have to have a mental breakdown from the stress of sourcing for money to meet up with the emergency, as most emergencies tend to be expensive, taking a huge sum out of your business or other income, can drain you and also take time to recover.
3. Having Low Credit Score
There is a common joke in my country about running away from some people in purple shirts because we believe them to be 'Palm Credit officials, they have purple as their official logo colour, palm credit is an online loan app, and some people take these loans with no interest in paying back, thinking they are smart, what they fail to realize is that they have created a bad credit score for themselves which could obstruct a better loan offer for something more lucrative in the future, and over time, this unpaid loan gathers into a huge amount, it might take time to pay up your loan, but it's always best to pay up your loan even if it takes time than leave it to accumulate interest and leave a bad credit score for yourself,
4. Living Above Your Means
This social media age has pushed a lot of individuals into living a fake life, they want to have something to show off on Instagram or Tiktok and end up living to impress people while wallowing in debt, living a fake life doesn't give you the satisfaction you desire, instead, it accumulates debts for you, which invades your peace of mind, stop this habit if you do, instead learn to budget and spend within your reach, not more.
5 No Retirement Savings
You are not too young to start planning and saving for retirement, some elders now, made that mistake during their vibrant youth, they felt it was too early one thing they forgot is that the strength of the youth isn't the same as when they get older, only if they knew, they would have made better preparation by investing wisely also saving for when they retire and can't do stressful jobs they did then to make money, their savings and investment works for them this time.
Conclusion
By learning from these mistakes and adopting sound financial practices, we can steer clear of the boom-and-bust cycle, ensuring a more secure and stable financial future. It's time to break free from the patterns that lead to financial hardships and embrace a path of responsible money management