Common Money Mistakes Anyone Can Make

[odunybiz]

Mistakes has no master. There are even some mistakes made in life out of ignorance i.e not accepting them as a mistake. It is better one to check himself/herself after every fall to recognize the mistake he/she might have made that could cause the financial fall. Below are some common money mistakes anyone can easily make in life:

👉👉Borrowing money that accrues interest to start a business
Never borrow money that accrues interest to start a business (except if you are paying for it through your salary); only borrow to grow your business. This is because business takes a long time to gain ground and begin making profit, yet most loans repayments have to be made within a month of taking the loan or even earlier. Therefore, never borrow money to start a business expecting that the business will generate income to pay back the borrowed money plus the interest.

👉👉Spending money you haven’t received
Never spend money you haven’t received. Don’t even promise someone money based on a promise you have from someone else. If someone tells you: “Paul, come to my office tomorrow at 9am and pick #30K”don’t go out to buy items on credit based on this promise, with the hope that you will pay off your creditor when the promised money comes; it may not come as promised and this will leave you in problems with your creditors.

👉👉Spending before saving
If you want to save, whenever you receive money, don’t start spending hoping that you’ll save what remains. Normally what remains is zero because as long as money to spend is available, the numerous things you can spend it on are also available. And things to spend on even incite their ‘relatives’ so that you spend even more than you had planned. When money to spend is not available, we naturally find a way of doing without it. Before you spend any money, put your savings aside then spend what is left after saving.

👉👉Never take advantage
When you get an opportunity to meet a very wealthy person, never ask for money. Ask for ideas on how to make money. They may even choose to give you money on their own after seeing that your ideas are great, but let getting money from them never be your objective.

👉👉Saving instead of investing
Its highly better for you to plant your seed than keeping it. Many people stop at saving. It’s very, very difficult to save and have all you need to maintain your lifestyle especially after retirement. When you save, your savings are seed; plant it. When you just keep the seed (saving money) some seeds begin to die (eaten by inflation and the like).

👉👉 Lending someone money you are not willing to lose
By the time you lend someone money, be contented in your heart that should the person fail to pay, it won't really affect you nor affect your relationship with the person. Try not to lose a friendship out of failure to repay borrowed money. A friend you lose today may be the one to have help you in another way later.

👉👉Guarantee someone on a financial matter
Never append your signature to guarantee someone on a financial matter if you are not willing or able to pay the money on their behalf.

👉👉Keeping money you don’t intend to use in the short-term within easy reach
Avoid keeping money you don’t intend to use in the short-term within easy reach. For instance, don’t walk with #100K in your pocket when all your plan to do in a day costs #20K. Like I mentioned earlier, there are always expenses available to gobble any money that is within your reach, so if you don’t want to easily spend it, put it away in a safe place.

👉👉Spending money on an item that you can do without
For the time being, you should learn how to minimize your spending. Not all item is necessary to purchase now. Save more and spend less till you achieve your dream.

👉👉Paying an amount for something that’s not the minimum you can get
Getting your item at an expensive place when you can get the same item else where at a cheaper price. For example, buying a shoe you can get for #3K at Mokola for #5K. This is a money mistake except for those who have achieved financial freedom.

👉👉Saying yes to all financial need
Wanting to be the savior of the world by helping everyone in financial need. My sister, my brother, you are not Jesus. If you find it so hard to say no to a financial demand, you may think you are generous when in actual sense you are committing (financial) suicide. We are not learning to be miserable here; we are learning to live within the boundaries of reality.

👉👉Spending more than you earn
Consistently spending all you earn or more than you earn is a serious issue as such person won't have an opportunity to prepare for the future. We have to always ensure we are have something often no matter small it is to keep for the future.

👉👉Thinking short-term
Always try to consider your short term expenses when investing. Never try invest all your capital and be left stranded all because a business is lucrative.
      
                                        Reference- https://servantboy.com/14-common-money-mistakes/


CONCLUSION
Financial management can be a key to solve ones poverty. Most of this mistake are easily made by everyone including me.Is better we learn from all this mistakes and made amendment to achieve a financial stability.

[1714638294]

1714638294

[Die_empty]

I agree with some of the points the article highlighted let me briefly discussed these ones:
👉👉Spending money you haven’t received
Never spend money you haven’t received. Don’t even promise someone money based on a promise you have from someone else. If someone tells you: “Paul, come to my office tomorrow at 9am and pick #30K”don’t go out to buy items on credit based on this promise, with the hope that you will pay off your creditor when the promised money comes; it may not come as promised and this will leave you in problems with your creditors.

Spending before making profit or receiving is unwise because you might never receive such funds. It reminds me of the former world heavyweight champion Mike Tyson that goes on a shopping spree before winning the fight. He buys luxury cars, houses, and pieces of jewelry believing that he will win the fight. He ended up in debt and went bankrupt.

👉 👉Spending before saving
If you want to save, whenever you receive money, don’t start spending hoping that you’ll save what remains. Normally what remains is zero because as long as money to spend is available, the numerous things you can spend it on are also available. And things to spend on even incite their ‘relatives’ so that you spend even more than you had planned. When money to spend is not available, we naturally find a way of doing without it. Before you spend any money, put your savings aside then spend what is left after saving..

Saving helps to secure the future because it serves as backup during a loss of a job or emergencies. Some savings can be used for investment which might become profitable. But saving will only be possible if the person's income is enough to take care of the person's basic needs and remain. If someone's earnings cannot cover basic needs he cannot save because his focus is not investment but survival. Most people that are unemployed, underemployed or underpaid cannot save.
.

👉👉Never take advantage
When you get an opportunity to meet a very wealthy person, never ask for money. Ask for ideas on how to make money. They may even choose to give you money on their own after seeing that your ideas are great, but let getting money from them never be your objective..

There is a proverb that says don't give the fish but teach me how to fish. You don't need to expect much from people regardless of who they are. You don't need to be a liability to people because they will start avoiding you. But it's not also bad to ask for financial or other assistance if you really need the funds for investment.

👉👉Guarantee someone on a financial matter
Never append your signature to guarantee someone on a financial matter if you are not willing or able to pay the money on their behalf..

I have seen cases where people are sent to prison because they signed as guarantors for friends' or relatives' loans or business dealing. I will never become a guarantor in a business if I am not part of the management. I must know how the money or businesses I guaranteed is being operated or used. I should have a form of control over the business or funds.

[Dr.Bitcoin_Strange]

👉👉Borrowing money that accrues interest to start a business
Never borrow money that accrues interest to start a business (except if you are paying for it through your salary); only borrow to grow your business. This is because business takes a long time to gain ground and begin making profit, yet most loans repayments have to be made within a month of taking the loan or even earlier. Therefore, never borrow money to start a business expecting that the business will generate income to pay back the borrowed money plus the interest.

IMO, Borrowing money to do business is not much of a financial mistake. Someone may have a good business idea or plans in which, if they execute the business plan, their would be a big profit for them, and if they face a challenge of lack of finance to carry out the business plan where taking a loan is the only financial assistance they can get at that moment, that is not a mistake. By the way, there are different kinds of businesses, and whoever is taking a loan to execute a business plan should have known the risks involved in the business they plan to use the loaned money for. It's just my opinion; I may be wrong.

👉👉Spending money you haven’t received
Never spend money you haven’t received. Don’t even promise someone money based on a promise you have from someone else. If someone tells you: “Paul, come to my office tomorrow at 9am and pick #30K”don’t go out to buy items on credit based on this promise, with the hope that you will pay off your creditor when the promised money comes; it may not come as promised and this will leave you in problems with your creditors.

This is one factor that can contribute to an individual's financial crisis, but some people can't do without it because they have bills to pay all the time and because the high inflation rate in their country. They take credit to pay later, and in some cases, that's the only option they have. Also what leads some people into spending the money they are yet to earn is because they can say NO to some financial request from their relatives or friends.

[blockman]

I remember when my parents was told to guarantee our house's title as collateral for my cousin's loan. Yeah, I was naïve during that time and doesn't understand what's happening but I was already on the right age when that happened. I don't have freaking idea why my parents obliged to that request of my cousin because he's about to work somewhere else and that's for the processing of his visa and everything. But then, we get nothing in return when he's able to work and get some savings from it. That cousin of mine even had the guts to unfriend me on my social network accounts when he'd seen me doing average in life and asks me about money again but then, never again. The cut the story, well, the loan was paid in full eventually and I've talked to my parents to never do it again, I've reminded them that they shouldn't do that to anybody and even to me.

[Frankolala]

👉👉Borrowing money that accrues interest to start a business
Never borrow money that accrues interest to start a business (except if you are paying for it through your salary); only borrow to grow your business. This is because business takes a long time to gain ground and begin making profit, yet most loans repayments have to be made within a month of taking the loan or even earlier. Therefore, never borrow money to start a business expecting that the business will generate income to pay back the borrowed money plus the interest

This is very bad,I see people in my area taking loan from micro finance bank to start up a business,and they are to be paying back some quarter of the money every month for some duration of time. I would keep on wondering that how will these business people cope with paying back the loan,before you know it their business will crash. The reason is this,instead of a newly opened business to accumulate all the money sold everyday to put back into the business,this income will be slashed maybe 50-50 and half will be use to invest back into the business.

This is a bad start for a business that needs to grow in a long run,the business will end up failing due to poor management. The interest keep on piling up when you can't pay up your monthly quarter as agreed by both parties involved.

[adaseb]

Seems lately we are getting many threads like this which is based on savings and interest rates. Sure some types of debt are bad. Like you are not suppose to get into debt by buying a MacBook when you can just buy some cheaper PC which will get you by just fine.

Other debt like a mortgage is fine since it’s typically appreciating asset unlike assets such as cars or computers. Credit card debt are the worse because they have the highest interest rate and they can get out of hand very quickly because it’s just so easy to spend all that credit you were given. Hence this is why financial literacy should be taught in schools because it’s getting out of hand lately.

[Lorence.xD]

👉👉Borrowing money that accrues interest to start a business
Never borrow money that accrues interest to start a business (except if you are paying for it through your salary); only borrow to grow your business. This is because business takes a long time to gain ground and begin making profit, yet most loans repayments have to be made within a month of taking the loan or even earlier. Therefore, never borrow money to start a business expecting that the business will generate income to pay back the borrowed money plus the interest.

There some cases that borrowing money for starting business wouldn't be so bad. Some people doesn't need to think of their capital since they could loan money for them to have a business. You just need proper planning whether  to pay your monthly loans, expenses and investment. For example in real state, I've seen many people who owned a lot of properties by just borrowing money. They rent it out then the income from it would be the payment for the loans in a long period of time the property would be his own.

👉👉Saying yes to all financial need
Wanting to be the savior of the world by helping everyone in financial need. My sister, my brother, you are not Jesus. If you find it so hard to say no to a financial demand, you may think you are generous when in actual sense you are committing (financial) suicide. We are not learning to be miserable here; we are learning to live within the boundaries of reality.

This one for me it wouldn't be consider as financial mistake for helping your family? I mean its up to you for helping them for their needs. Its common sense to not give up all your funds for them since you also have expenses to pay. I've helped a lot of times my family especially in the time of pandemic, but I planned it before helping them it might causes me to drain my money. It maybe not that big fund as long you can help. Its up to you when you take responsibility for them, it would be better to not give huge amount for you to have savings.

      
    

[o48o]

-cut-
👉👉Borrowing money that accrues interest to start a business
Never borrow money that accrues interest to start a business (except if you are paying for it through your salary); only borrow to grow your business. This is because business takes a long time to gain ground and begin making profit, yet most loans repayments have to be made within a month of taking the loan or even earlier. Therefore, never borrow money to start a business expecting that the business will generate income to pay back the borrowed money plus the interest.
-cut-

Every loan i can imagine has some sort of interest. Otherwise people wouldn't give loans, as it would not make any sense for them.
But if you have a business idea, why do you think it's not wise to aquire startup money as a loan? Especially if alternative is taking too long and someone with money just takes your business idea while you are still building it.