Personal Finance 5 financial planning mistakes everyone should avoid
Your personal finance is important to achieving your goals. That is why you should avoid these five mistakes.
If financial planning sounds familiar, it’s because you’ve heard or read about it somewhere, but you’re probably not applying it in your personal finance.
Financial planning is the process that helps you to find the shortest route from where you are to where you are going to financially.
However, there are some common mistakes you’ll have to avoid during your journey to financial freedom.
1. Saying YES to everything
Savings helps you in more ways than one. Just save.
If you are a family man or woman, you’ll always be obliged to respond to your family demands due to emotional connect with your family members
But, this can lead to a drain in your finances if you always say YES to both necessary and unnecessary financial demands. It is important you keep the family goals in mind and avoid unnecessary spending.
2. Acquiring high/bad debt
Preventing yourself from overspending is one way to to stop worrying about your finances
You can take loans to meet certain financial goals. It isn’t a bad idea at all, but how you manage the loan payment matters a lot.
Personal loan, home loan and car loan should be kept to a minimum. Don’t take loans that will break your back financially and sap your strength in meeting others important goals. When you’re applying for loans, also apply moderation.
3. Skipping saving while you’re paying off debt
Spending problem can seriously affect your personal finance.
You can’t afford to ignore the loan you get to get something done. It is a debt for you. The moral and legal obligation to settle is debt is on you. However, when you’re paying your debt, try your best to save no matter how small. Set aside some money as an emergency fund, as this can help you reduce the temptation of getting more loans when an emergency happens.
4. Delaying when you start to save
Saving and investing early help to avoid financial stress at old age and if you don’t that, it is important you start saving as soon as you get your first job. Never delay saving because delay they say is dangerous.
5. Not having a plan
Don’t make financial choices you might regret
No one talks about actualising financial goals when there is no financial plan. You just have to plan to meet the goals.
Ask yourself where you want to be in the next five or ten years. Do you want to own a home? Have a car and be debt-free? It is possible to achieve all that. Having these in mind and working to achieve it is the beginning of your financial plans.