In this article you will know 5 financial mistakes that hurt your future enormously. Get to know them so you don’t fall for them.
We tend to constantly compare ourselves with those around us. With our family, friends and even with those people who are not to our liking.
The worst thing is that the standards by which we measure ourselves are completely superficial (This is one of the biggest reasons why we make financial mistakes that hurt):
- Who has the best car?
- Or who has the best house?
- Or who takes the best vacation?
Unfortunately that is the method we use to measure our success. It’s sad, don’t you think? The worst thing is that this phenomenon has become exponential with the use of social networks.
The lives of many of the people we follow look incredible behind the filters of Instagram and Facebook. However, we know that these images are simply a distorted view of reality.
Those few moments saved on the Facebook wall or in the Instagram stories; they don’t even make half of the life of their users.
So this article, more than teaching you the financial mistakes that harm you, aims to show you that you should focus on things that are truly important for your life and of course your happiness.
Enjoy your life and stop envying the lives of others. Competing and pretending only leads you to make bad financial decisions.
Take control of your life and your future by avoiding these 5 financial mistakes that harm your bank account and your life.
5 financial mistakes that harm your bank account and your life.
1. Allow your lifestyle to take the reins of your destiny.
It is very difficult not to fall into this trap. Who wouldn’t want to be able to enjoy the convenience of having money available to buy something they’ve always wanted? Maybe something you never would have bought without a raise, or that extra income.
If you have been constantly working on a project or looking for a promotion, it is very likely that at some point you will generate more money than you have now.
The important thing is that you do not increase your lifestyle faster than you can maintain it.
One of the most important financial rules is to live below your means; Only then will you have the possibility to save and invest.
two. Have only one source of income.
This is a topic that we have touched on over and over again in ModoEmprendedor. One of the keys to wealth is generating multiple sources of income.
Just think about it from a security perspective. If the only source of income you have is your job and one day your boss gives you the disastrous news: “You are fired”; your finances would go to the ground.
Now, if you have two or three sources of income and you lose one; the impact on your finances would not be as high.
A second source of income is basically life insurance. You never know when there will be a downsizing or a financial crisis.
Do not think that a second entry must be a complex business or a large company. Simple business models can give your income a boost and these can grow over time; according to how your knowledge and dedication increase.
Also read: 5 Excellent ideas to make extra money and from home.
3. Acquire assets that behave like liabilities.
One of the greatest banners of the lifestyle and success of every Latino professional is owning a car. What a joy it is to have your first vehicle. Go out with your friends, with your girlfriend, go for a walk with the family on Sundays…. “The car is so important.”
I’m sorry to tell you that financially speaking, buying a vehicle is one of the worst investments.
Even if it appears as an asset on your personal balance sheet, it is an asset that continually depreciates. If to this we add the interest on vehicle credits and inflation; buying a new car is the worst deal you can do.
It should be noted that the transport systems in some countries are chaotic and inefficient, forcing people to buy cars in search of a more comfortable, faster and sometimes decent way of transporting.
But do you need a luxury car? The latest model? Do you need to beat someone by showing that you have a better car? Not really.
Your mobile phone and other technological products behave in the same way. So think about investing your money, not spending it.
If you want to know more, it is vital that you know what passive income is.
4. Not actively tracking where your money is going.
If you were asked right now how much money you spent on transportation; be it gasoline, taxi, train or bus tickets, in the month of February, would you have the exact answer? Or maybe how much you spent on the weekends in March and on what.
Being aware of these transactions will give you a much clearer picture of your finances. And as a result, you will have more control over them.
You’ll know exactly where you’re spending more than necessary and what you need to do to increase your level of savings.
Also read: 17 smart ways to save more money.
Additionally, you will be able to plan precisely when you will be able to pay off your debts or how much you will be able to invest at the end of the year.
Our bank accounts are like bathtubs full of water. Every time we pay something, we get Water to do it. What we don’t know is that these vats always have little holes through which our income leaks; without us noticing.
The only way to detect these holes and plug them is by tracking all your expenses, and for this you need to make a budget for your personal accounts.
5. Not planning for your retirement.
This is one of the most damaging financial mistakes millennials don’t even know it.
Being young is great because you have all the time in the world to learn, experiment, make mistakes, fall down and get up again. However, one of the downsides is that we don’t understand how fast the next 30 years will go by.
If you talk to anyone over the age of 50, you’ll find that they all wish they had started saving for retirement sooner.
Even if you have other goals right now, you should develop a strategy for when and how you want to retire, and what you need your net worth and retirement funds for when you get there.
Conclusion.
To the extent that you avoid these financial mistakes that hurt you, you are automatically on the path to a much more prosperous life and closer to financial independence.
I hope this information is of great help to you and that you start applying it today 🙂
And remember, if you are really interested in creating your own business, you can read our book “How to create a company while working: Discover how to manage your time, manage your money and motivate yourself while creating a company and working for another” , where you will find all the information you need to found your own company, without having to leave your job.
