When a new year begins, we find ourselves making resolution upon resolution- promising ourselves that this year will be different. I’m sure you did that with money too. You told yourself – “Once January starts, my finances are going to turn around.”
How far have you actually gone? In this post, we’re going to discuss those bad money habits that you know you have to drop- and then we’ll go a little further to share how you can let them go as quickly as possible.
What are your bad money habits?
1. Living a lifestyle you can’t afford- When people get to a country like Russia and they see everyone else around dressing nice and using cool gadgets, there’s that subtle pressure to join the clique.
You know you’re a scholarship student with irregular payments or your parents are trying their best to keep up with your fees, but you’ve decided to chill with the big boys and live the large lifestyle. You then find yourself telling lies, borrowing, or even doing illegal businesses.
The best thing to do is to look back at where you’re coming from and look ahead to what you’d like your life to look like in a few years. Realise that every money decision you make now has a direct effect on your savings and future plans. Then make good friends who won’t pressure you to live beyond what you have.
2. Borrowing- Some people can’t help living above their means to the extent that they get money from others to fund their lifestyle. Borrowing can quickly drain your income and have long-lasting consequences especially if it comes with interest.
While borrowing can be necessary in case of serious financial emergencies, you must avoid it like a plague. This is because borrowing can be addictive since it is a quick fix for discontentment and can help sponsor your unnecessary urges.
The best bet to stop borrowing is to sit down and adjust your lifestyle below your income. Stop spending money you don’t have. It’s absolutely okay to forego that night out with friends or ordering from KFC when your budget is already running over.
3. Not having an emergency fund- It may seem unimportant at the moment, but having a solid emergency plan can literally save your life. An emergency fund is simply savings meant for emergency situations as often as they occur.
You know you don’t even have to borrow when you get into emergencies (health issues, job loss, family issues, etc. – not ‘emergency’ shopping). You can just dip into your account and return it as you steadily earn your income.
Save up an emergency fund by setting aside a small percentage of your income every month and store it up in an account you won’t touch until absolutely necessary. That way, any day any time there is a financial issue, you won’t have to fret.
4. Falling for Ponzi schemes- Every time we see people complaining about losing money to one Ponzi scheme or the other, we wonder how they never saw the signs. Some people keep losing over and over again, hoping to one day hit the jackpot.
How do you recognise a Ponzi scheme? They promise quick returns of an investment after a quick payment into the system, and ask you to refer friends over and over again before you can earn any tangible amount from the scheme.
One way to avoid falling into these traps is by being very patient and content. Do all the required research and establish your knowledge about any field before you jump into it. Ask questions and look for reliable sources before you pull out your money.
5. Not increasing your income: You want to live the huge life. You want to be able to afford all the things you’ve been adding to cart since last year, but you’re not willing to work for it. It’s not possible that way.
Start a business. What’s that idea that’s been on your mind for a while? Get started. Ask questions and put your capital together. Sell a product or service. Market your skills and earn from them.
Don’t just sit there wishing for more. The first key to a financially independent life is increasing your income. Look for a way to get some money through something you can offer or explore other legal options. There is always something to do where you currently are.
6. Not learning about personal finance- Learning is a lifelong process and quality advice always yields lasting results. Reading a book, watching a YouTube video or listening to an entrepreneur talk about personal finance are great time investments in your financial future.
Here at E-Solutions, our goal is to help you build a money lifestyle that you will be grateful for in the future. We take you through the processes of personal finance, student lifestyle, savings, investment etc.
Learn all you need to know about financial independence by staying on our page and reading as much as you can. You can even book financial consultations and get good money advice from time to time.
Take full responsibility and be diligent with your personal finances today. Stick to your budget. Save for emergencies. Track your expenses. Invest in trusted businesses. Give often. Ask questions. Pay off your debt. Diversify your income.
It’s possible to be financially free. And it starts right now.
