We all make mistakes. We are humans after all. However, making financial mistakes every single time can be costly. In today’s #AlfredDaily episode, we will be talking about the top 5 financial mistakes that you need to avoid:
1. Getting Into Bad Debt
There are two kinds of debt: good and bad. Good debt is debt used to earn more money. Bad debt, on the other hand, is more on consumer debt or debts incurred to consume different products and services (that doesn’t generate any kind of income).
Getting into bad debt is a costly financial mistake since it will drain your future income. The income that you will generate tomorrow will just go to debt payments. Time will come that you will realize that you are just working to pay all of your debts. That’s not inspiring at all.
2. Not Building an Emergency Fund
If you are living paycheck to paycheck, a sudden or unexpected expense will surely bring financial disaster to you and your family. Having an emergency fund ready will enable you to take some emergency expenses. Neglecting the importance of having an emergency fund is one of the financial mistakes that you need to avoid at all cost.
3. No Budget, No Plan
Having no budget or no financial plan is a surefire way to financial disaster. It is a financial mistake that you should be avoiding. Having a budget means that you have control over your money. You are its master. You dictate where they will go.
Having no budget or financial plan means that you aren’t in control, you are a slave to your money, and you will always wonder where your money went.
4. No Insurance
Many of us think that because we are too young, healthy and careful today, we won’t die, get sick, or be involved in any accident tomorrow. People, life is uncertain. Those who are unprepared will surely perish financially.
Don’t make the mistake of thinking of life insurance as an unnecessary expense. Your latest gadgets, expensive coffee or vacation won’t save you and your family financially when you get sick, involve in an accident, or die.
5. Not Investing
We are not getting any younger. Our working days are slowly diminishing every single time. If you want to be financially free someday, you need to let your money work harder for you. Stop working so hard for money. You need to realize that your money is a worker bee. They don’t age. They don’t get tired. They have limitless possibilities.
You, on the other hand, is aging every day. You are getting tired. You have limitations. Choose wisely and let your money work for you!
Prevention is better than cure. Don’t wait for something bad to happen to you before you realize the importance of taking care of your finances. Like and share, people!