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money mistakes

February 5, 2018 Leave a comment Go to comments

A thought popped into my head this morning. A new year typically means new year resolutions. I am sure each and everyone has something they would like to try or do differently. I especially hope everyone with a resolution is able to keep the promises they’ve made to themselves.

I also thought about what the most popular resolution might be and I’m sure it’s probably to spend wisely, or at least, save money – the strategy is usually to spend less and save more/lower costs in order to increase profits; usually by buying what you need not what you want – which could be as simple as asking yourself “What would happen if I don’t buy this?” If you find that you can live with the consequences of not having it, then, move on. For some, that strategy works, but for most, the line between Needs and Wants could get really blurry, so I thought to share an article I came across sometime ago.

The article focused on common personal/business finance mistakes a lot of us make in order to help people save by correcting certain attitudes and habits towards money. I can’t remember where I found it or who wrote it, so don’t give me all the credit. I did, however, tweak a few things and added my thoughts here and there. I do hope you find it helpful.

 

Account Receivables

Please, never spend money you haven’t received. Don’t even promise someone money based on a promise you have from someone else. If you are promised money tomorrow, don’t go out to buy items on credit based on this promise, with the hope that you will pay when the promised money comes; it may not come as promised and this will leave you in problems with your creditors.

 

Bargain Price

Please feel free to either ask merchants for their lowest offers on their goods/services or negotiate. It makes no sense paying an amount for something that is not the minimum you can get that same value for, except, of course, you’ve achieved financial freedom.

 

Borrowing Limit

Please, never lend someone money you are not willing to lose. By the time you lend someone money, be content in your heart that should the person fail to pay, you will not die. You should not even lose that person’s friendship if they fail to repay the money you lent them. If you feel the person might fail to pay you and this will not affect your relationship with them, then lend them money. If their failure to pay would make you hate their entire clan, please advise that person to go to a bank.

 

Business Loans

Please, never borrow money that accrues interest to start a business (except if you are paying for it through your salary) because business takes a long time to gain ground and begin making profit, but most repayments must be made within a month of taking the loan or earlier. You should only borrow to grow your business. Again, never borrow money to start a business expecting that the business will generate enough income to pay back the borrowed money, plus the interest. If you do, you will only put undue pressure and strain on yourself and the business respectively.

 

Good Fortune

If you get the opportunity to meet a very wealthy person, please, never ask for money. Ask for advice and ideas on how to make money. They may choose to give you money on their own because of how ambitious or industrious you are, but let getting money from them never be your objective.

 

Guarantor Services

Please, never append your signature to guarantee someone on a financial matter if you are not willing or able to pay the money on their behalf.

 

Invest Savings

Please don’t simply stop at stuffing money in your savings accounts. Well, it’s alright to do that, but the issue with that is the money doesn’t grow rapidly, and may overtime, due to inflation and the likes, lose value. That is why it is important to put your money in investment vehicles – not in a business – that can grow your savings.

 

Savings Discipline

Please be disciplined. If you want to save, whenever you receive money, don’t spend and plan to save whatever remains. That never works because as long as there is money to spend, there will be numerous things you can spend it on. However, when money to spend is not available, you will naturally find a way to do without it! Therefore, henceforth, before you spend any money, put your savings aside first and forget it exists; then, make do with what you have left after saving.

You also shouldn’t keep money you don’t intend to use in the short-term within easy reach – in a bag, in a pit, in your socks, under your pillow – or else, some unexpected expense will gobble it up. If you don’t want to lose your money, put it away somewhere you can’t easily get to it.

 

Yes Man

Please stop trying to save everyone in financial need; you are not Jesus. If you find it so hard to say no to a request for financial assistance, in a bid to practise generosity, you’re actually committing financial suicide and working towards a life of misery. If it’s going to be inconvenient, or make your financial goals unattainable, just say no.

 

Multiple Streams

Please get a side hustle or a couple of them. It is unwise to depend solely on one source of income. It is easier to meet financial obligations with multiple streams of income. Be careful not to increase your spending drastically because you have more money. As your income increases, try to manage your expenses, so you’re not consistently spending most or all of your earnings!

 

I wish you well on your savings journey.

Please don’t waste your money.

Money in the Trash

Hopefully, this isn’t too late, and by the end of year, you would have reached your personal and/or business savings target(s).

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