Losing money is as bad as it gets. It can lead to depression and much more worst scenarios. Financial intelligence is needed so that there can be judicious use of money. This is not the time to throw away money.
As hard as it may seem to get by, every penny should be accounted for. In this period, it is important to take full control of one’s finances to avoid making silly financial mistakes. To be in charge of your finances and control money instead of the other way round, here are financial mistakes you should avoid:
1.Not having a budget
It is unwise to start spending money without a budget. Your budget serves as a guide on what is important to you, what you can afford and what you need to let go of. Having a budget tells best your money should be divided into other investments. It is not enough to have a budget, you need to be disciplined enough to stick to it religiously.
2. Living beyond your means
If you are living above your means to impress people, then there is no point. They don’t matter or careless so why stretch yourself for validation. You should stop making this financial mistake by splurging on expensive things, impulsive buying, and living paycheque to paycheque. This lifestyle would make you incur debts which in the long run would prevent you from meeting your financial goals and prepared for retirement. Sit down and have an assessment of your spending habits and make necessary changes where needed.
3. Having no say in your financial decisions
This is another common mistake made by women. As a married woman especially, don’t leave larger financial decisions like long-term investments and retirement plans for your spouse alone. Even though you pay household bills and manage the budget, still be very much involved in the bigger financial picture of your future. Always discuss this with your spouse and get all the information and knowledge you need e.g the assets you have, the worth of the assets, life insurance, etc.
4. Saving not investing
Adopting a savings culture is good, however, it is equally essential if not more financially smart to invest the money instead. This is because investments help your money grow by generating returns during the investment period, unlike savings which just sit idle in your account. You can start by investing in either fixed deposits or mutual funds. Also, discuss with investment experts who have the right knowledge to guide you on the right investment options.
5. Not having an emergency fund
Life is full of surprises and an emergency can happen unexpectedly. This can be in form of a job loss, health issue, death of a spouse which may affect your finances. With an emergency fund, you can rest assured during rainy days that you are sorted out.
6. Not having a side business
Living from paycheque to paycheque is a risky way of living. It is better to have a supporting side business popularly called a side hustle to make room for more financial wealth. According to a survey in 2019, women are more likely to have a side hustle, and 65% of women between 18-34 have one. Never underestimate the benefits of having a side hustle as it is instrumental to your long-term financial goals.
7. Not thinking of retirement enough
Don’t succumb to the mistake of failing to plan for retirement early enough. It is pathetic to still go around depending on your children or relatives for money at your old age. This is avoidable once you start creating a clear plan for retirement. You can also seek third-party advice for more clarity.