4 COMMON MISTAKES PEOPLE MADE WITH THEIR FINANCES IN THE PAST YEARS - page 5.

South Park

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Quote from: btc78 on January 05, 2024, 03:38:34 AM

First of all, A happy new year to you too!

I always get this advice to list down my expenses in order to lessen it but i have been doing this for years and yet i feel like i am still spending too much than i can i know what i spend most of my money on so tracking your expenses definitely helps you identify what should you cut down on which leads me to my point that if you just list down your expenses and do nothing about it nothing will happen

You can know what you are spending on and still continue to spend money on that category what you need to do after listing your expenses is to change your attitude and be devoted to controlling your finances maybe even find alternatives to what you have been spending on

That is the correct thing to do, if you enjoy something but it is costing you a lot of money what you need to do is to find an alternative that is cheaper, this way you can keep getting the same enjoyment while you save, however there are many people that are so set in their ways that despite knowing this information they prefer to do nothing as this will require a change on their habits, over the years I have met a lot of people like that and despite their supposed claims to want to save more money, I know they are just fronting and they have no interest in changing anything at all.

Twentyonepaylots

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This year I wanna focus on listing my expenses, this is the mistake that I don't want to repeat this year. Most of us may overlook expenses on a daily basis and tracking it is one of the lesson I've learned, I am able to scrutinize my expenses and come up with new ideas on how can I optimize my daily budget. I'm guilty of how I spent my money last year, like I don't see ordering from online restaurant a luxury but once you do it often it becomes the price of a brand new phone in 2 months, so imagine all the unnecessary items or services you are getting are able to buy expensive stuff in theory.

Fortify

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Quote from: Gormicsta on January 05, 2024, 02:54:36 AM

Hello everyone
Wishing everyone a wonderful new year, I've taken time to draft and explain just a few mistakes a lot of people has been making when it comes to their finances over the years and do not even realize it.
Here are 4 common mistakes people made with their finances last year that should really be looked into and avoided this year in order to achieve your financial goals.

1. NOT HAVING AN EMERGENCY FUND

2. NOT INVESTING

3. OVERSPENDING

4. NOT TRACKING EXPENSES

It can be very difficult for many people to keep their spending under control because they are unaware of their exact monthly expenses.
It's important to keep track on your spending so you can figure out where your money is going and adjust as needed. There are numerous ways to address this issue and keep track of your spending; you can do this by utilizing a spreadsheet, a notebook, or even a budgeting app or software.

There's some very good advice in there, but you might find that many people are merely surviving on a subsistence type level while they're younger - especially as they fall into the trap of overspending. One good thing about investing while you're younger is you have plenty of time to earn back money when you inevitably make mistakes, but you have to treat it as a learning experience and not go all in too early. Lots of people have been burned by poor investing strategies and swear off it forever, but they overstretched and probably picked poorly, instead of registering that they need to research better or identifying why an investment failed compared to other successful ones, then they could cut themselves off from a very powerful source of financial freedom in future.

0t3p0t

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Quote from: Gormicsta on January 05, 2024, 02:54:36 AM

1. NOT HAVING AN EMERGENCY FUND

2. NOT INVESTING

3. OVERSPENDING

4. NOT TRACKING EXPENSES

This is legit for me and it happened to almost all of us. I am guilty to this and this is the reason why I lost opportunities to have more assets in the past. But I have already learned that mistake and hopefully will follow the right path.

iv4n

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Quote from: Gormicsta on January 05, 2024, 02:54:36 AM

1. NOT HAVING AN EMERGENCY FUND

2. NOT INVESTING

3. OVERSPENDING

4. NOT TRACKING EXPENSES

It's good to have an emergency fund, but without some nice income it's hard to put money on the side that can cover "saving & investing". Overspending is not something that we can control, especially if we need to take care of a family and maintain the household. Many things can happen all of a sudden that will take our money from the wallet. And this inflation is not helping, my salary hasn't gone up as much as the prices have gone up.

So, you have good points here, but without income, it's hard to do anything. And to get to nice income it's not so easy... some people get there, but some never do.

tjtonmoy

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Most of the mistakes I have corrected already in the past year one of those being overspending. I have also learned a valuable lesson. The more you keep holding your money to yourself, the less valuable it becomes. Unless you find a way to make your money grow, it is worthless. Money makes more money. If you don't have the ability to make more money from the money you have right now, you will only suffer in the future.
There's a saying that goes something like this, "If we keep on spending without doing anything, even the king's treasury will become empty". So we can assume how dangerous this is.
We need a way to grow our money otherwise we will be left empty-handed in the end.

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Quote from: Solosanz on January 05, 2024, 10:11:26 AM

Quote from: jrrsparkles on January 05, 2024, 09:42:02 AM

The latter is a complete mistake unless you can assure whatever happens even if the government fall apart still you have the guarantee to make $100K annually.

Avoid taking a loan is fine but it's not the only one required if you want to become financially independent.

How it can be a mistake? why you forcing someone to save or invest their money when they have 100% right with the money they have? don't forget there are more than 50% people living by paycheck to paycheck. It was in US, one of top paying country and have a good education, I don't think they don't learn about saving and investing, but they choose to live with that.

Well there's no guarantee you can earn a same amount of money in the next year, two years later etc, but that's their own risk. At least it not gonna hurt or give a bad effect to other people. If they take a loan, then their family are in danger if the loan can't be paid.

It doesn't matter how much they make, all that matters is how much that is left and if they have nothing left then they have to keep working to meet the needs of the next month and that is what is supposed to be called as modern-day slavery. Its our choice to make, how it is going to be but if I am picking I will choose the save and invest so that I have financial security as much backup plan and don't have to keep pushing myself hard.

US is best at everything, that is just an illusion/myth.

What would you prefer, whether your father left nothing for you or something to inherit?

pawel7777

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Hello OP. Happy New Year to you too!

Quote from: Gormicsta on January 05, 2024, 02:54:36 AM

Having three to six months' worth of expenses saved is a good rule of thumb. However, each person's circumstance is different.

Emergency fund is a must. You could argue how big should it be, but if it's also for the purpose of house repairs and job loss, than 6-months worth, seems like minimum. Although it might be a better idea to figure out a depreciation rate for all your assets and transfer the equivalent of it (+ a bit more on the top) to your emergency fund on each pay-day. Such fund then could grow to more than six-months worth, but could be used for major works like house renovation etc.
Of course, holding it as cash or in no-interest bank account would be a waste, given the inflation rates are still quite high, so you could combine that with your point 2 - investing and invest it somewhere, provided it's a type of investment that allows you to divest in a relatively short time. Otherwise it would be useless as an emergency fund.

Quote from: Gormicsta on January 05, 2024, 02:54:36 AM

One of the largest and most common mistakes people made in the previous year was not investing.

Everyone who has any savings or any surplus wealth is invested in something. Often time they're invested in cash money, one of the worst types of investment, that is designed to lose its value through inflation.

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Quote from: Gormicsta on January 05, 2024, 02:54:36 AM

1. NOT HAVING AN EMERGENCY FUND

2. NOT INVESTING

3. OVERSPENDING

4. NOT TRACKING EXPENSES

Thanks buddy you have point out a good thing. Even then it is a common thing for many people and may it is not that important for them. But I think that this post can make a reminder for all of us. When I saw your topic title I thought as usual normal topics yes it is as usual normal topic but important.
Anyway I think on those four common mistakes I did two of them on the past year like Overspending and also not tracking the expenses, I have trying many time to track my expenses but for my ignorance on it I can't continue this and I think this is very essential to track own expenses, If the expenses are tracked, then I can understand where I am overspending, and it is also convenient to take a budget strategy. Anyway after seeing your post I making a format on spreadsheet for tracking my expenses Grin

franky1

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for those with an inability to successfully track spending, or constantly over spend..
.. dont wait until months-end to realise when things go wrong

instead realise many people are happy to sign up to like 6-12 credit cards.. so when ditching the credit cards. set up 6+ debit cards
this way before spending you control budgeting limits of debit cards. rather than credit card limits controlling you at the end of the month

using the account that receives income, set up automated payments to only put budgeted amounts into each debit card per week. whereby you then label /mark each debit card for a certain purpose. that way you have the limits preset before spending

yep even if you get paid monthly you can then set weekly spending limits on EG grocery labelled debit card. so you dont blow the whole months money in one week

bussybuddy

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The allure of instant gratification can lead us to buy unnecessary things, often driven by a desire for social validation rather than genuine need. These impulse purchases, fueled by the "look expensive" mentality, can drain our pockets and leave us with a hollow feeling. But the lack of expense tracking only deepens the problem. It's like driving blindfolded, completely unaware of where our money goes. We might feel a temporary high from the purchase, but the long-term consequences can be crippling.

That's where tracking your expenses becomes a powerful tool. It's not about becoming stingy or depriving ourselves; it's about gaining control. It's like shining a light on our financial landscape, revealing where our money flows and where it could be better utilized. By setting expense limits and mapping out a budget, we take back the reins. We become conscious of our daily, weekly, and monthly spending patterns. We see where our money leaks out, where we could tighten the belt, and where we could redirect it towards more meaningful things.

Gormicsta

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Quote from: cakravothy on January 05, 2024, 11:28:41 AM

The emergency fund can be saved in the bank or to buy gold. the point is that liquid and liquid quickly with no loss and quickly become money when needed.
gold besides being easily liquid can be and emergency at the same time can be for investment and can be for a luxury

You are 100% accurate. You're right that gold can also be a wise choice, even if most people believe that storing their emergency fund in a savings account is the best option. One of gold's advantages is that it is liquid and has a long-term worth. It is true that gold can be used as an investment and that its value will increase with time. But it's crucial to keep in mind that gold is a volatile commodity with fluctuating values. Thus, even while it might be a smart choice for an emergency fund, it's crucial to diversify your investments and not place all of your money in one place.

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Quote from: Gormicsta on January 05, 2024, 02:54:36 AM

1. NOT HAVING AN EMERGENCY FUND

Emergency funds are funds that must be prepared in financial planning. These funds are very important to anticipate urgent situations without having to take funds from other sources that have been prepared for individual needs.
Emergency fund preparations are often prepared by large companies or other institutions that manage activities on a large scale.

In annual financial planning, 100% must be allocated to emergency funds, at least 10% to 15% if financial planning for other areas requires a higher percentage.
Emergency funds may be used when the situation requires us to use them. If not, keep the funds safe.

Even though our income is not as large as other people's income, preparing an emergency fund is mandatory. I often refer to an emergency fund as an unexpected expense that I have to set aside every month, depending on the amount of income and other needs.

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Quote from: Gormicsta on January 05, 2024, 02:54:36 AM

Hello everyone
Wishing everyone a wonderful new year, I've taken time to draft and explain just a few mistakes a lot of people has been making when it comes to their finances over the years and do not even realize it.
Here are 4 common mistakes people made with their finances last year that should really be looked into and avoided this year in order to achieve your financial goals.

1. NOT HAVING AN EMERGENCY FUND

2. NOT INVESTING

3. OVERSPENDING

4. NOT TRACKING EXPENSES

There are many people who are just too comfortable being employees, they just want to get paid their salaries, save a little portion of the salary which they use to offset future expenses and life goes on. No investment spirit. Many of them are just scared of change, not like they actually love their usual routine of life and that's why their finances never improve, instead it keeps decreasing as the value of goods and services keep increasing.

Having savings is good but when these savings do not yield interest/returns, it is good as not saving at all. Most times, these savings in Fiat get affected by inflation and the money can no longer solve a significant problem. This is the more reason we need to cultivate the investment habit this year. And this can be achieved if we create a budget and cut down on unnecessary expenses so we can have enough to invest with. Fear has never solved any problem, therefore we must pull ourselves together can act wisely for our own benefit.

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The emergency fund can be saved in the bank or to buy gold. the point is that liquid and liquid quickly with no loss and quickly become money when needed.
gold besides being easily liquid can be and emergency at the same time can be for investment and can be for a luxury

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Quote from: Gormicsta on January 05, 2024, 02:54:36 AM

Hello everyone
Wishing everyone a wonderful new year, I've taken time to draft and explain just a few mistakes a lot of people has been making when it comes to their finances over the years and do not even realize it.
Here are 4 common mistakes people made with their finances last year that should really be looked into and avoided this year in order to achieve your financial goals.

1. NOT HAVING AN EMERGENCY FUND

2. NOT INVESTING

3. OVERSPENDING

4. NOT TRACKING EXPENSES

Happy New Year too friend.

That's right, my friend, these four points are points that are often violated by most people in managing their financial flows. It's true, implementing these four points is not as easy as we imagine. However, for the economy to be more stable and well organized, these four points must be put into practice well. Because if, for example, these four points are not implemented well, I believe it is very likely that the economy will not be well organized.

Moreover, points number 1 and 2 in my opinion are the most crucial points if not put into practice. Because emergency funds and investments are very important things to have. Because these two points play an important role in planning a better future.

bayu7adi

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Quote from: Gormicsta on January 05, 2024, 02:54:36 AM

2. NOT INVESTING

I believe that investing is not the root cause of someone's financial mistake. Investing is still a strategy that is not prioritized but we need it for future , or maybe end game. Even though many people make a lot of money, not everyone needs to invest... it depends on each person's financial situation. Blaming someone for failure just because they didn't invest is very wrong.

I prefer to call it "Mistakes in Investing" rather than what you mentioned, which is "Not investing." Even a professional can still be very wealthy with a high salary, even without investing. Maybe their assets come from just one source, but that source is substantial and could even surpass the income of someone who invests.

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Quote from: jrrsparkles on January 05, 2024, 09:42:02 AM

The latter is a complete mistake unless you can assure whatever happens even if the government fall apart still you have the guarantee to make $100K annually.

Avoid taking a loan is fine but it's not the only one required if you want to become financially independent.

How it can be a mistake? why you forcing someone to save or invest their money when they have 100% right with the money they have? don't forget there are more than 50% people living by paycheck to paycheck. It was in US, one of top paying country and have a good education, I don't think they don't learn about saving and investing, but they choose to live with that.

Well there's no guarantee you can earn a same amount of money in the next year, two years later etc, but that's their own risk. At least it not gonna hurt or give a bad effect to other people. If they take a loan, then their family are in danger if the loan can't be paid.

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Quote from: Gormicsta on January 05, 2024, 02:54:36 AM

Hello everyone
Wishing everyone a wonderful new year, I've taken time to draft and explain just a few mistakes a lot of people has been making when it comes to their finances over the years and do not even realize it.
Here are 4 common mistakes people made with their finances last year that should really be looked into and avoided this year in order to achieve your financial goals.

1. NOT HAVING AN EMERGENCY FUND

2. NOT INVESTING

3. OVERSPENDING

4. NOT TRACKING EXPENSES

I think many of them are still unaware of excessive spending, such as buying something that is not really important, and this happens because of their will. especially with today's young people, many of whom insist on buying something of high value even though they don't really need it, and with this habit of course they will not think about funds for saving or investing, even though by saving or investing it will make them prepared to his future.

also with those who don't think about emergency funds, such as people who have limited income but they always prioritize their desires compared to their needs, even so I think they have to save for urgent situations such as accidents or illness, because of course to overcome that we need emergency funds, no maybe just relying on borrowed money, it's not always like that and it's also not the only solution, therefore I think to reduce excessive spending, they have to be able to restrain their desires, because it's not surprising that nowadays many people prioritize their desires rather than that need.

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Quote from: Solosanz on January 05, 2024, 08:55:23 AM

Someone earn $100,000, spend $1,000 and invest $99,000.
While another one earn $100,000, spend $100,000, and invest 0.

Which one is right and which one is wrong? the answer both of them are right, as long as you don't take a loan, you're fine.

The latter is a complete mistake unless you can assure whatever happens even if the government fall apart still you have the guarantee to make $100K annually.

Avoid taking a loan is fine but it's not the only one required if you want to become financially independent.

Topic: 4 COMMON MISTAKES PEOPLE MADE WITH THEIR FINANCES IN THE PAST YEARS - page 5. (Read 768 times)