It’s clear that most people do not have the proper skills in Financial Planning. You have by now witnessed a jackpot winner became broke in matter-of weeks and a low wager worker managed to save into purchasing a home. However, we can conclude that commitment and discipline is key to attaining a healthy financial breakthrough, Both in business and at home. Though it’s very easy to spend money, earning it is hard.
So, what are some primary Money Mistakes that most people make? Below We take a look at some of these. Let’s get started.
Relying on a single income source
This can be a big mistake since it limits the how much Money you have available for investments. It’s advisable that you diversify your income sources should the Mainstream income fail.
Also for young Singaporeans with lots of energy and time, having the second job or establishing a business can offer them additional benefit. Since renting in Singapore is rather pricey what can you do remain on track with your finances? Always ensure that your housing costs don’t prevent other long-term objectives and financial goals.
Not having a working plan for repaying student loans
What is the effect of not planning how to repay your student loan debts? This mistake includes not consulting experts and financial advisers on student loans to teach you on the different terms of service such as interest rates.
Again, you need to have a strategy on how you are planning to repay your existing personal loan. When possible, do not take personal loans offered by exorbitant moneylenders, at all times. For instance, you can consider applying for scholarships, grants or seeking a day job to help you cover the fees charged.
Replacing items like electronics and furniture when they aren’t broken
Another mistake most people tend to make is deciding to change sofa sets each year of which it may not be a good idea. Particularly when you have modest amounts of money that can better be spent elsewhere. Opting to get the most current electronic device like a TV can hinder the process of growing your Wealth.
Why is this money mistake so critical to your financial well being? Also, this can prevent you from pursuing other things that are more important, such as making savings for retirement or a house.
Spending all the cash
It’s very risky to spend all your cash as it puts you in a vulnerable situation. Again, it makes saving hard with all the cash gone.
Why is spending all your money a risky move? Most financial goals are attained by making savings. Thus it’s essential that you set goals and targets for your finances. This is a great motivation for saving. Many financial Advisors recommend the 50/15/5 rule for savings and spending; 50% on overall expenses, 15% for saving on retirement and 5% goes to normal savings.
Having a good working budget is one of the main pillars of planning your finances. When making a budget, be sure to compare your capital inflows against your expenditures. Also what matters is to have the commitment and the discipline to always follow it.
Additionally, even with a working budget, you will also need to keep track of your overall spending. Why do you need to keep track of your spending patterns? In so doing, you will be able to see if they match with the budget or not.
Attempting To Keep Up With Current Fashions And Trends
Trying to have the latest fashions and trends is for sure not the best idea. What makes this a big financial mistake? Since this spending option is a money killer, it can lead to huge debts as you get personal loans from moneylenders to fund your desires.
As you try to upgrade to the current trends, you will typically not be matching your lifestyles. And this will mean that you are spending more than you earn. Moreover, having that latest i-phone will not make you happier compared to purchasing your own house.
Not saving for retirement
When you make a steady regular income, why is saving for retirement an essential part for you? Saving for retirement will help you cope then since you won’t have a stable income source. Several employees in Singapore rely on the retirement plan offered by their company. But, without monitoring closely, this may not be sufficient. Another hindrance is that most Singaporeans think that they don’t have enough cash. But, oftentimes this isn’t the case. Considering that with step by step saving can be the one huge difference.
Not differentiating between needs and wants
To help you avoid this money mistake, it is important that you know the difference between need and wants. For most Singaporeans, this is a big mistake since it will imply that you cannot recognize when to avoid spending and when to spend.
How can telling a need and want help you in your financial planning? It is very essential that you clearly know the difference between wants (these are simply exaggerated needs) and needs (necessities that you can’t live without). this will help you decide as you make any purchases.
Not planning for major life events
Why is this money mistake important as you plan your money? As you get into a solid commitment like marriage, it is only right that you do it when you are financially stable. On the flip side, getting a child is a big responsibility and it’s not advisable to take on without becoming Financially stable. For instance, arranging or planning a wedding with no sufficient financial backing may be a bad idea. Hence, it is crucial that you save for such big life events.
Even then, attaining financial independence is very possible helping you lead a stress-free life; without any financial pressures and burdens. All you should do is make plans and follow-through with your plans. In so doing, you will achieve your goals!