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Making mistakes is common to us all; that’s how we learn. But it’s always better to avoid it as much as we can & learn from the mistakes of others. To help you get to grips with your personal finances in 2022, let’s look at 5 most common financial mistakes you should avoid so you can thrive financially in 2022.
1. Deciding Not to Save and Invest in Your Future: Not putting aside a portion of your money to save and work for you is a big financial mistake. Because the sure way to meet long-term financial goals is with a smart savings and strategic investments. Include smart savings and strategic in your financial plan early next year. The earlier you begin to save and invest, the better off you’ll be later.
2. Starting the Year Without a Good Financial Plan: A good financial plan or budget helps ensure you’re properly attending to your needs, living within your means & allocating funds to your savings, wants, investments and other areas. It’s about putting together SMART (specific, measurable, achievable, relevant, time-bound) goals and an intelligent savings and investment strategy that will help you achieve your financial goals.
3. Not having an emergency fund: When you don’t have any extra cash set aside, you’re most likely to use more expensive ways or methods to finance your life. You need to have a fund for emergencies, equivalent to at least three or four months’ worth of household bills. Once you have set aside this amount, in an accessible deposit savings account, you can start looking to the future by saving small amounts in a normal savings account.
4. Spending more than you can afford: It usually doesn’t seem like a big deal to spend a few extra cash weekly on buying clothes or stuffs you don’t necessarily need; but, multiply this amount by 52, and that’s the amount that you are wasting every year! Therefore, it is wise to have a monthly budget; otherwise, you will end up overspending in the year 2022.
5. Living paycheque to paycheque: Depending solely only on your monthly income or paycheque can be a tough position to be in because if your expected income or paycheque doesn’t drop, you will be in a tight position. Ideally, it would be best to create other possible streams of income and also have at least four to six months’ worth of your monthly expenses in your bank account, in case of emergencies.
Other Common Financial Mistakes You Should Avoid Include:
- Not making a passive income.
- Rushing unprepared buy a new car or a new home.
- Borrowing money
- Paying off debt with your savings
- Not having proper insurance in place
- Not improving on your negotiating skills and paying full price for everything
- Not saving for your child’s future
- Postponing saving for retirement
- Lending money without thinking
- Overcommiting financially
The entire Buzwallet team wishes you with loads of love compliments of the season and a financially prosperous new year in advance.
Cheers!!!
