Lots of people make money mistakes trying to become wealthy. These can cost them their fortune, and they’ll be back at square one.
Even if these mistakes are rookie ones, considering human nature when we start acquiring larger and larger sums of money, they can be avoided. If you haven’t been making these money mistakes – you’re one of the few, but if you have – here are ways you can avoid making them!
1. Spending more than you earn.
You just got a new job or are starting your own business and money is starting to flow into your bank account.
You are now earning enough money to live through the month and have extra leftover cash which you can use in various ways. The only problem is that you’re making more money than ever before, and you think you can spend it on whatever you want instantly.
You start paying more and more while earning the same. After a while, you’ll notice that your bank balance is unusually low.
Try to avoid this situation by limiting the amount you spend each month – you don’t need to spend it all in an instant.
2. Relying on one income stream.
Most successful and wealthy people don’t rely on only one way to make money.
If you have extra time to do some work for some extra cash – take the chance. This way, even if one of your income streams fails, you’ll have at least something to resort to until you get your main income stream back on track.
3. Trusting without proof.
Even if you think someone is very trustworthy by how they look – you should be cautious. People are often not what they appear to be, and they can take advantage of that fact.
For example, you want to get insurance for your automobile. Even if these insurance companies are often trustworthy, there are some that are frauds. It might be better to take the route of online auto insurance.
4. Investing in trends.
Trends change as time passes, and it’s not a smart idea investing in them. Sure, you might earn a big amount of money during the time a trend is popular, but once that changes, the popularity of that trend will most likely not be back, and you won’t earn any more money.
After all, you’ll end up losing money when that happens, and you surely don’t want that. So that’s another one of the money mistakes you want to avoid.
Related: 7 Things You’re Doing That Will Never Make You Rich
5. Not trying to increase your income.
You have a stable job, and your business has been making money since its inception. You are happy with how things stand and you’ve been making a constant amount of money.
Why would you want to stop here? Push for even more income, for even more sales, everything! Improve yourself and your business and watch as your bank account fills up. Don’t be content with what you have – always push for more!
6. Spending on things that make you even poorer.
Only buy things that you know will pay back/make your life easier. For example, if you buy a very expensive car or a huge house, and you don’t have enough income to maintain them, you’ll end up poor and bankrupt.
If you’re wondering where your paycheck is going every month, check out the infographic below by Peachy.
7. Believing finances will fix themselves.
If you’re having a hard time with your business, don’t just sit around and expect things to fix themselves. Finances and businesses don’t work this way. You need to be constantly involved with everything you do if you expect to fix things and avoid money mistakes.
Related: Manage Your Money Like a Boss
8. Failing to obtain proper insurance.
Sure, it might be expensive to keep insurance over things, but ask yourself if it’s worth not being insured. If anything happens to you, your property, your business – you won’t get any money back for the damage. It’s better to be prepared and have nothing happen, than not be prepared and something bad happening.
So which of these money mistakes have you been making?
About The Author
This is a guest post by Bill Brown. He’s part of the Marketing team of Auto Insurance group.