Spending money wisely is a skill we should all have. But sometimes we do make mistakes with our finances. Besides losing money, these mistakes can also cause problems with our relationships as well.
Here are a few money mistakes that you should avoid:
1. Failure to create a spending plan
This is the most common money mistake that people make. Knowing that the latest iPhone will be on the market soon, we focus on getting it without realizing that there are other more important things to spend our money on.
Some users of high-end mobile phones don’t even really use all of the features of their phones. The reason why they buy these expensive phones is just to prove to people that they can afford it. But can they really afford it?
2. Spending money on impulse
Seeing a huge billboard ad about a 3-day sale at a certain mall can entice a lot of people to shop without truly thinking if they need them. But do you really need to buy new things?
3. Paying unnecessary bank fees
This is also one common mistake among some credit card holders. They think that they can max out their cards and then spread the payment across several months. If the items purchased can be paid at 0% interest, then it is fine.
Otherwise, their credit card will incur finance charges that add up until they settle their bill.
4. Ignoring receipts
We should always make it a habit to check our receipts before leaving the cashier because sometimes, the cashier may accidentally add another item which we did not purchase.
Also, it is important to keep them, particularly when you are purchasing electronic devices or appliances. If need to return the item or have it repaired, you need to have a proof of purchase. Otherwise, you might end up having an endless argument with the sales clerk or sales manager.
5. Falling for easy-money
A lot of people nowadays entice others to invest in a networking business for a certain amount, promising that it could double up if they “recruit” more people to invest with the same amount.
These are called Ponzi schemes that eventually collapse. Instead of relying on easy-money, it would be much better to invest your money in things that truly earn a profit like real estate or insurance. Just make sure that you deal with legitimate people.
6. Not setting an emergency fund
Of course, we don’t want any bad thing to happen to us or to our family. But accidents and sickness can happen. Learn to save at least 1/3 of your monthly income for your emergency fund.
Money isn’t easy to earn. Learn to prioritize the things that the family needs and learn to save.
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(Armando Bartolome is known as the Philippines’ Franchise Guru, a mentor to numerous micro entrepreneurs who are now themselves big names in the industry. This article is reposted with the author’s permission and was previously published on The Business Mentor column posted by ABSCBN News. For questions and more information, you may contact Armando “Butz” Bartolome by email: email@example.com or on Twitter @philfranguru. His website is https://www.gmbmsglobal.com/ )