4 COMMON MISTAKES PEOPLE MADE WITH THEIR FINANCES IN THE PAST YEARS

[Gormicsta]

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



1. NOT HAVING AN EMERGENCY FUND

Not having an emergency fund was one of the greatest financial mistakes people made last year.
Money put aside for unanticipated expenses, such as a job loss or medical emergency, is known as an emergency fund. It can be quite challenging to cough up for these unforeseen expenses without an emergency fund. Furthermore, it could be even harder to get your finances back on track if you have to take out a loan to pay for them. Having an emergency fund is crucial, and while many people made this error last year, they should not repeat it this year.

People may ask, What is the appropriate amount to save?

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

2. NOT INVESTING

One of the largest and most common mistakes people made in the previous year was not investing. This is something that should be avoided this year and this could be considered for two reasons.

Firstly, the power of compound interest is something you lose out on when you don't invest. When the profits from your investments are reinvested and yield even higher profits, this is known as compound interest. This might really build up over time and expedite the achievement of your financial objectives.

Secondly, failing to invest equates to not diversifying your financial holdings. Inflation puts your purchasing power at risk if all of your savings are in cash. However, you can diversify your investments and possibly shield your money from inflation by making investments in securities like stocks and bonds.

Investing is a critical component of long-term financial growth and protection. Thus, if you haven't invested, it's critical to do so right away and create a strategy for the future. It's never too late to begin investing, and over time, even little sums can have a significant impact.

3. OVERSPENDING

Overspending is a prevalent issue that many people experienced in the previous year and ought to be avoided in order to take charge of your finances this year. Reaching your financial objectives may be challenging and financially stressful if you overspend.

Impulsive purchases, trying to keep up with the Joneses, and not keeping track of one's expenditures are a few of the reasons why people overspend.
It's extremely important to establish a budget and fully understand your spending habits in order to prevent overspending. With the use of a budget, You can track your income and expenses, spot areas where you're overspending, and create financial objectives.

4. NOT TRACKING EXPENSES

Failing to keep track of one's spending was another common error made by individuals last year and should be avoided this year. This is a serious issue since it makes it difficult to manage your finances, accomplish your financial objectives, and it may even result in debt and overspending.

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.

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[btc78]

4. NOT TRACKING EXPENSES

Failing to keep track of one's spending was another common error made by individuals last year and should be avoided this year. This is a serious issue since it makes it difficult to manage your finances, accomplish your financial objectives, and it may even result in debt and overspending.

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.

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

[Egii Nna]

3. OVERSPENDING

Overspending is a prevalent issue that many people experienced in the previous year and ought to be avoided in order to take charge of your finances this year. Reaching your financial objectives may be challenging and financially stressful if you overspend.

Impulsive purchases, trying to keep up with the Joneses, and not keeping track of one's expenditures are a few of the reasons why people overspend.
It's extremely important to establish a budget and fully understand your spending habits in order to prevent overspending. With the use of a budget, You can track your income and expenses, spot areas where you're overspending, and create financial objectives.

You are right, but I will emphasise more on the issue of overspending because many people engage in buying useless things that are of no use to them, but they feel like buying these things makes them look expensive, which is not true because all the things you buy for the sake of showing up will end up wasting the money that you are supposed to invest and end up discarding all of them because they are somehow useless to you.

Some solutions to stop this overspending, as you have mentioned above, are budgeting, tracking your expenses, and a lot more, but the most important thing is having financial discipline, because if you have financial discipline, you won’t end up spending unnecessary money unless you are already addicted to overspending because people also do get addicted to spending unnecessary money, which is another case entirely that you have to meet a counsellor to guide you on that aspect again.

[Husires]

The mistake we all fall into is not knowing the amount of spending we need, or our spending is always equal to or greater than what we collect, so that the amount remaining for investment is very small and decreases over time. Unless you have discipline in expenses, you must start doing so because any additional investment will not make you rich.
I agree with you on all points. Without sufficient funds to cover your expenses, knowing where your expenses are and directing any surplus amount to investment and diversifying investments, you will not achieve any financial successes.

[franky1]

an emergency fund should start as just 1 month of household bills (not repairs or upgrades), just bills
this is the first step to escape the reliance on credit cards for normal monthly expenses.. if you can afford your rent, utilities and groceries without needing to use a credit card, you are making a step forward

this is where you learn to spend within your means from your income which is buffered in savings where it cycles to refill the savings when you get next paycheque. thus detaches you from needing to use credit during the month, by instead having a months worth of account balance to live on which replenishes when you get paid

then expanding that to a few months of bills amount saved, which can also encapsulate surprises like repairs

once you know you can survive without using a credit card. thats where you then start paying down any debts

once debts are lowered your payments lower allowing you to pay down debts faster, via the extra spare cash

when you are freeing up more money by having less payments and already having a buffer, when you are free from consumer/regular debt, you can then use that spare cash to invest

[Hewlet]

Inability to track your expenses could become a serious challenge regardless of how much you're earning because no matter how small the amount of money you are spending his, if you keep doing it regularly, it would surprise you to know how much you've lost as a result of your carelessness.

One of the best thing you can do for yourself is to make a regular saving immediately you receive your pay, ensure that you send out a particular amount of money so you know that whatever you are spending is just a leftover and you need to be disciplined enough to tell yourEkf that you would not spend more than a certain amount every week.

[retreat]

Tracking expenses is very necessary for someone to be able to track how they spend over a period of time. By tracking expenses, a person can see how his expenses and income are at one time and see how his finances are performing, whether it is good or bad. From tracking expenses he can see what things he wastes a lot on or needs to cut back on. There is a lot of information that can be obtained by tracking expenses and if one does not do this, it is certain that he will miss the opportunity to be able to review how his financial performance is at one time and that may have an impact on his financial condition.

[MainIbem]

4. NOT TRACKING EXPENSES

Do you know that when you keep tracking your expenses you won't be able to release fund from your hands, naturally when you release money another one gets into your hands and I won't encourage holding fund at hand without putting it somewhere else. Lets say if you keep holding funds without investment, or without utilizing the fund the value ought to reduces due to inflation taking over our economy and again when you keep tracking your expenses you become too greed and stingy to release money either to your family and love ones.

To further expand this is; Set a limit of your expenses, map a budget of your daily, weekly and monthly expenses to enable you manage and track your money the way you may think of. If all these things are put in place you can be able to determine how much goes of your hands and how much is going to your savings account by then you can be able to look out for a good investment to involved yourself without waste of time.

[angrybirdy]

Tracking expenses is very necessary for someone to be able to track how they spend over a period of time. By tracking expenses, a person can see how his expenses and income are at one time and see how his finances are performing, whether it is good or bad. From tracking expenses he can see what things he wastes a lot on or needs to cut back on. There is a lot of information that can be obtained by tracking expenses and if one does not do this, it is certain that he will miss the opportunity to be able to review how his financial performance is at one time and that may have an impact on his financial condition.

That's true and It is a great help to us, especially to people who are busy in life, it would be good if we have an expenses tracker and budget planner so that we can better manage the money that comes into us. I've been doing it since last year and I saw my improvement in budgeting, it helped me especially when I had to save because i have so many bills. One of the things I liked the most is that I can immediately see what is likely to happen in the next month, in that way I can immediately take action in case my money is short or I need to cut expenses.

[naira]

1. NOT HAVING AN EMERGENCY FUND

2. NOT INVESTING

3. OVERSPENDING

4. NOT TRACKING EXPENSES

Not everyone has a stable income to set aside emergency funds or for health insurance, let alone investing where the income is sufficient only to meet needs in the next 2 or 3 days. So for them, the principles of investment, emergency funds and health insurance can only be implemented when each month finances have more left over after basic needs have been met. Talking about excessive spending, what is the benchmark for saying someone is spending excessively when we ourselves have different desires according to our needs. For example, buying a washing machine is not considered very important for you as long as you can wash manually, but for other people it could be important and help make the job easier. Things in the excessive spending category are still views from one side to another and cannot be generalized.

[Lucius]

Not having an emergency fund was one of the greatest financial mistakes people made last year.

Why only last year, was 2023 so specific from previous years? Most people are not financially literate and spend more than they have, and with such thinking they cannot put some money aside.

Investing is a critical component of long-term financial growth and protection. Thus, if you haven't invested, it's critical to do so right away and create a strategy for the future. It's never too late to begin investing, and over time, even little sums can have a significant impact.

What will you invest if you don't have enough to live on - or if you decided to create an emergency fund? Even if you have some money that you can risk to invest in something, how many people know how to choose an investment that is as safe as it is and has a solid yield?

Impulsive purchases, trying to keep up with the Joneses, and not keeping track of one's expenditures are a few of the reasons why people overspend.

You cannot spend more than what you have in your wallet, and before shopping, make a list and take as much money as you need, no more than that. Of course, leave your bank card at home because it is something that people spend the most with, because paying with a card definitely makes people lose track of how much they have spent.

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.

The "problem" is that following such statistics makes people feel bad because they spent too much, and they want the shopping experience to remain a pleasant memory. If I bought something expensive and it makes me happy, then I don't want to be reminded that I spent too much money.

[icalical]

1. NOT HAVING AN EMERGENCY FUND

2. NOT INVESTING

3. OVERSPENDING

4. NOT TRACKING EXPENSES

Among those 4 points, many of the people I know skip the first point, they have little to no emergency fund, most of them are employee with fixed monthly salary, they are living healthy life, they think they will not need any emergency fund. Then Covid hit, companies are laying-off their employee, some of them living from their small saving. This makes them realized that no-one is safe and everyone needs emergency fund.

[Hamphser]

3. OVERSPENDING

Not tracking or financial management is something that you had neglected if you do commit out this kind of mistake on which it would really be just that normal that you would really
ending up on messing  your finances on the time that you would really be derailing yourself when it comes to financial matter.
This is why it would be that better that you should really know on how to handle your finances well because if not then it would really be that a disaster.
People do commonly made out their realizations on the time that they would be experiencing hardship and not into that earlier time.

[Solosanz]

Nah those of them aren't important, the most important is do you get a job that pays well? if someone earn a lot, there's no need to think about emergency funds, investing, overspend and tracking expenses because your income is higher than your expenditure.

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.

[jrrsparkles]

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.

[junder]

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.

[Solosanz]

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.

[bayu7adi]

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.

[Charmekkd]

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.

[cakravothy]

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