A List of the Top 11 Financial mistakes People Make Everyday

[Jasz]

Financial mistakes are made every day, by people of all ages. The most common financial mistake is not saving enough money for retirement. But there are many other mistakes that can be made, from buying too much house to forgetting about those credit cards you’ve been paying off for years.

Here are the most common financial mistakes:

1. Not saving enough for retirement.

2. Spending too much on credit cards.

3. Not having enough cash on hand for emergencies.

4. Failing to pay down debt before it becomes unmanageable.

5. Wasting money on luxury items and experiences.

6. Spending too much time and energy trying to save money.

7. Failing to pay off debt early and often, which leads to higher interest rates and more expensive repayments in the future.

8. Investing in companies that pay little or no dividends, which means you'll miss out on the potential for higher returns if these companies perform well.

9. Investing too much in stocks or funds that offer high returns but low risk; this is known as "high-yield investing", where you're risking losing your entire investment with any bad events such as a recession or market crash.

10. Buying insurance products that don't provide adequate protection for what you want to protect yourself against (for example life insurance which won't cover you after your death if you leave a will).

11. Not understanding how your investments work or what they do, which leads to poor investment choices and higher risk when things go wrong (a stock market crash could wipe out an entire portfolio).

 

[Jasmine]

I think most of us have seen people who say, let me enjoy life, saving can happen later on. This kind of attitude is the biggest financial mistake. Saving should be started as early as you can. Even a kid should start saving, Saving will be possible only when you earn money and only when you dare not spending your money. How much money you make does not matter when you cannot save. One of the major problems associated with saving is people cannot differentiate necessities with wants. You need to pay rents, this is a necessity, but buying 2 t-shirts when you already have over a dozen t-shirts is nothing for just a want. If you want to save, you need to identify your wants, and try to stop spending on your wants. Think do you really have to spend $10 on ice creams, do you really have to spend $5 on a chocolate bar?

 

[Mika]

I started saving money when I was still in high school. I heard how to save money from my mother. She used to save some money from the allowance my father gave her to run the family. I learned how to work hard from my father. My father's saving was the provident funds offered by his employer. However, once in a while he used to withdraw the funds to make big purchases or pay for huge expenses (medical bills for example, or buying a motorcycle). He never invested but he funded his kids' education. I bought my first bicycle with the money I had saved. I paid my MBA fees from the money I had saved. When I started working, I did not save money, I enjoyed things that I had missed. I started saving after two years of working. Then I systematically began to invest in the stock market and equity.

 

[eldavis]

Number four is a pretty common issue today, I was once a victim of this some time back. There was a time I have some debts to pay and I had the cash but I felt I needed to wait Abit to get more case, the idea made sense but in the end it was the wrong decision. It got to a point where the I could not cope with the debt at hand.

 

[Sotherefore]

One of the things that makes me to spend some of my money then was on airtime. Now it is very much easier since everyone has access to Android phone and with that you can really call people using WhatsApp which is one of the cheapest way of interacting and communicating with people across different borders without having to spend much.

In terms of emergency purposes I have some extra funds that is mainly delegated for this and I don't really use it for any other thing..

For now I don't really have so many things to do and I am also at the same time trying as much as possible to avoid spending my money on unnecessarys things that does not have value. . If we can't control the amount of money we spend on daily basis may likely spend so much money and not being able to save a single penny.

 

[Abigael]

These mistakes are really grave. Yet so many of us still make them. It takes so much self awareness and a choice to change these habits. And it is best done before it is too late.

Think of saving for retirement for example. If you don't start early, you will end up getting old with no proper source of income and will have to be dependent on other people. Therefore, you should start saving for it as soon as you start earning money.

Another mistake is getting into unplanned debts. There are so many disadvantages associated with debt. First, you will never be financially stable because you have expenses and at the same time, you need to pay off debts. Secondly, being in debt could make your mental health suffer. This is because you will be so anxious and think a lot, plus you are always in quarrels with the person or institution you borrowed from.