1. Bad money habits.
No matter how big your salary is, you will never get rich if you have a bad money habits. Realizing that you have a bad money as soon as possible can make a big impact on your financial situation. Asses how you spend and save your money and if you think that your money is bleeding, plug it immediately and change for the better.
Before you buy the latest laptop in the market, think first if you NEED it or just WANT it. By prioritizing the things that you NEED, you will be spending your money wisely.
Avoid shopping just because there is a SALE and do not be an impulsive buyer especially when you are already struggling with your finances.
In other words, adjust your lifestyle according to what you’re earning. Budget your money and follow this simple formula: Salary – Savings = Spend. Prioritize saving money for the future instead of spending your income then putting your left over money to your savings.
Remember to create a budget and stick to it no matter what. Discipline plays an important role if you want to get rich. If you have any vices like smoking, drinking alcoholic beverages, or gambling then try to stop because like shopping, traveling or eating out often, these are also reason why you spend your hard earned money. Just think how much money you spend on your vices?
2. Think long-term.
Most people doesn’t think long term in their financial decisions. They usually savor the fruits of their labor and spend all their money then later on starts to borrow money because they don’t have any savings.
Are you familiar with this saying “Travel Now Pulubi Later”? There are people who love to travel but don’t have any money in their savings or emergency fund. Read our article about delayed gratification to know how it can help you.
Don’t get me wrong, there’s nothing wrong in enjoying your hard earned money, but I highly suggest that you think long term. You can still travel but make sure that you budget your money. You can try Budgeting With The Help of An Orange Envelope help you manage your money wisely.
Some of the long-term goals that you should start planning right now are:
a. Savings. This is one of the basic but most commonly disregarded by people. Everyone should start a savings account. If you need to help in choosing the best account you can read this article.
b. Emergency fund. You should save at least 3 to 6 months expenses. Just in case something happens like accident or loss of job, you can be sure that you have spare money for daily expenses, bills and to survive until you can get back to your feet.
c. Insurance which you can use if unfortunate situations happen in the future. It could be sudden death, disability, or accident.
d. Investment. Planning your retirement is also recommended so you don’t have to worry about money in your old age. That’s why you should start investing your money so that you will have more time to grow your money and use it maybe in future travel or for your retirement. Investment can also be used to secure your children’s college education in the future. Read our article about “Why You Need to Invest”
3. Make a decision base on logic and not on emotions.
People can be easily be blinded by their own emotions. You should learn how to control your emotions and decide base on what’s logical and what’s best for you. Don’t decide involving your money when you’re angry, scared, or depressed. Your tendency is to become irrational or impulsive and can easily make the wrong decisions.
How many people have you seen spend their hard earned money on vices just because there are heart broken or sad? People who are emotional or under emotional stress are more likely to waste their money on vices, gambling, drinking and things that will make them feel good even to the point of emptying their bank account.
4. You’re living a lifestyle beyond your means.
Reality check, some people are show off! If you try to live a life of the rich even when you’re not then you should STOP! You do not have to pretend to be rich in front of your friends. If they leave you just because you are not rich then they are not real friends at all. Remember, money doesn’t buy real friends!
You also do not need to follow the latest fad like gadgets and fashion especially if you can’t afford it. Just be humble and live within your means and you’d likely to become rich.
There’s no doubt that money can let you have a good time but having more money doesn’t mean that you will have more fun. FUN is relative, what fun to you maybe not fun for me. Remember when you play with your friends when you were young and have fun even if you don’t have any money?