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Money Management Mistakes. How You Should Handle Money?

Do you know that every second person in the world makes one or even several financial mistakes every day, which seriously affect his financial situation? And this is not surprising, because financial literacy like any other science requires special treatment and attention. But, as is known, only those who do nothing do not make mistakes. Therefore, do not worry, because in this article we will tell about the most common mistakes that are peculiar to each of us.

Non-recognition of income and expenses

Every month (or better once a week) you need to clearly record exactly what amount you received as a salary. It is equally important to always note what you spent money on. Thus, you will always know what your funds went to and can take appropriate measures, refusing unnecessary waste. But these are just the beginning of financial errors.

Impulsive purchases

It is this expense item that quite often takes away most of your money. You saw an attractive advertisement for a new dress or gadget and immediately rushed to spend newly received funds. And only then you understand that this purchase was not so necessary, and the spent finances could have been saved for later. To prevent this from happening, always consider all your expenses in advance and make appropriate lists before each visit to the store.

Hope for retirement

Some think they have worked all their lives and at some point can rest. Of course, every person deserves an appropriate reward for their work, but a single social security is unlikely to cover all your financial expenses.

Financial mistakes – forgetting to save money

It does not matter if you are 20 years old or 50 – start saving some of your earned money as early as possible and create your own accumulative capital. Cannot set aside a lot right away? Begin at least from 1-2% of your income and gradually bring this figure to 10-20%. You can be sure that with a reasonable handling of finance, the creation of such capital will not affect your comfort level at all.

Fear of investment

The fact that you now have accumulated a certain amount of money does not mean that you need to keep money under the pillow. A good idea is to open a bank deposit. But do not be afraid to invest finances. Learn the investment of finance – the capital of an experienced investor brings him from 15-30% per year on an ongoing basis.

Neglect of insurance

In this case, do not be like people who collect insurance policies, like a collection. However, if you have your own home, car and any valuable property, then all these items will be very reasonably ensured. Perhaps you will never need these policies. But, as you know, life is characterized by constant variability, and there can always be situations in which insurance can be a real salvation not only for you but for your loved ones.

Lack of financial plan

It has already been mentioned above how important it is to keep records of income and expenses, and also to consider all your expenses in advance. But to achieve something, you must set specific goals, and the financial sphere is not an exception. For example, you want to spend a vacation abroad this summer. You have carefully considered this goal and are sure that this is really what you need. In this case, book and pay for tickets in advance – it will be much cheaper. Allocate a certain part of the funds for vacation on a monthly basis, take care of medical insurance and be sure to think in advance of all future spendings.

Lack of investment in yourself

Financial errors can be very diverse. So, if you ask, where it is better to invest, the best investment tool will be you. Constantly develop. Try to read as much business literature, attend various seminars and pieces of training that will help you earn more or improve your life in some way. All these investments are necessarily repaid many times.

Wrong choice of profession

Statistics show that only about 40% of all people hold a position that corresponds to their education. It is never too late to change qualifications or start your own business, especially if you have decided what you really want from life.

These were the most common financial mistakes, from which it is worth getting rid of in the first place. Of course, this will take a considerable amount of time, but all the efforts spent in this direction will certainly raise the quality of your life to a whole new level. 

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