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

[sana54210]

The thing is that some of these things are no mistakes, but situations that were difficult for some people to control because at the start of last year 2023, they planned to have emergency funds, to invest, not to overspend, and to track expenses, but it did not work out for them because of how poor their economy is, they are not earning enough to even spare some for emergencies and also investments and then try not to overspend but due to the ever increasing price of things in the market they keep spending more than their budgets and then they have also stopped tracking their expenses because tracking their expenses makes them depressed seeing that they are spending more money than they are earning and balancing the rest up with debt. The situation of things is really very difficult for some people in some places, and due to that, this year may be a repeat of last year.

The only thing you have 100% control over is tracking expenses, poor or rich, have trouble or not, you can always track your expenses no matter what happens in your life, just start an excel, new tabs for each month, and just check what it goes to. I have done it for 2023, and unfortunately my biggest spending was medical bills, it's both terrible because it's health and family members so it's emotionally devastating, but it's also quite expensive as well :/.

In the end, I didn't end up saving anything, and have no emergency funds, I do have some investments, but not monthly investments, just whenever I happened to have some money. What could I have done?

I mean not like you can just say "let's not get sick", so it was an unfortunate year for me, I hope this year becomes better but I am currently sick with flu, there is a big viral going around in my nation and hospitals are flooded with people who have flu, I am doing better than most thankfully, most people say that they are feeling worse than even covid, they barely get out of bed, I am doing a bit better than them, just a fever and feeling super tired, which I can handle, so 2024 didn't start that great neither unfortunately.

[CryptopreneurBrainboss]

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.

Reading through your thread, all I could think about are this three words and that's 'Lack of planning'. It's as a result of lack of financial planning that we don't have emergency funds, investment funds and spend to the point that wr don't realize that we're over spending until you're done spending. A financially serious person is supposed to have had all this under control.

You can't see a millionaire slacking back in these things or they'll lose their wealth. The hardest thing to do isn't to make the money but to retain it as not many people are learnings that while hustling for the money. To avoid making this same mistakes this year, we have to plan our money before receiving the money.

When your salary gets into your account split it into different accounts for the different things you're doing. Send the part for investing into an investment account, the spending for a spending account and the same thing should be done for others like the grocery, daily expenses and so on. Planning makes you conscious of what you're using your money to do and when you're directing your money and not your money directing you, you won't fall a victim to what this thread is all about.

[alastantiger]

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

While you are correct, Just wanted to say that I'm some countries they are not issued credit cards. What they have is debit cards. Therefore in the case above I think it would be right to say that ...this is the first step to escape the reliance on loans.

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

For some people who have to deal with black tax. The explanation above is the same. I'd like to add that spending within your means includes black tax. Do not let any family member guilt trip you in to spending above your means. They will be fine.

Read the whole of the quoted text by
franky1

[Sanugarid]

I don't track my expenses and I admit that is a mistake that I've been doing but that's not to the point that has made me broke. I can say that I know myself and I'm still responsible when its come to my expenses and finances. One another thing that I see with others mistake is that this is related to investing and what they do is they save to save and not save to invest. It's hard to invest when you don't have the idea on what type of risk tolerance you have but that's for each of us as an individual to figure out. Those savings that we have is much better be kept to investments that we know especially from most of us here, with Bitcoin.

Yah I agree, I don't track my expenses either but I know what I'm doing. It's hard to force others to invest because most of them are afraid to invest because they worked hard for that money, they can't let it go just like that in short they don't have any knowledge or lack of knowledge about investment things so they are afraid make a mistake.

[Gormicsta]

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.

Reading through your thread, all I could think about are this three words and that's 'Lack of planning'. It's as a result of lack of financial planning that we don't have emergency funds, investment funds and spend to the point that wr don't realize that we're over spending until you're done spending. A financially serious person is supposed to have had all this under control.

You can't see a millionaire slacking back in these things or they'll lose their wealth. The hardest thing to do isn't to make the money but to retain it as not many people are learnings that while hustling for the money. To avoid making this same mistakes this year, we have to plan our money before receiving the money.

When your salary gets into your account split it into different accounts for the different things you're doing. Send the part for investing into an investment account, the spending for a spending account and the same thing should be done for others like the grocery, daily expenses and so on. Planning makes you conscious of what you're using your money to do and when you're directing your money and not your money directing you, you won't fall a victim to what this thread is all about.

You've really hit the nail on the head.
One of the primary causes of people's lack of investment, emergency, and expenditure of cash is undoubtedly lack of planning. It's quite simple for us to get lost in the moment and lose track of the bigger picture, but doing so can have negative impacts on our financial stability.

Many people say that their low income is the actual reason they can't track their spending or save money for an emergency fund, but in my opinion, the real cause is lack of adequate planning. If someone had planned ahead and started saving money for the future, having a small income wouldn't be an excuse at all.

[DabsPoorVersion]

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

For most people, this is a financial mistake not only for the past year, but for almost all the years of their life.

This is true. But we should also consider the fact like those people are unable to have an emergency fund because they don't earn enough to provide for their daily needs in life.

Regardless of how much or how little your income is, I'll say having an emergency fund is very compulsory, even if you'll have to cut out or cut down a few expenses in order to meet up with your savings or emergency fund.

The same way you don't need to earn so much before you can use the DCA technique to accumulate bitcoin or grow your investment, so is it when it comes to gradually piling up some funds for future emergencies. So yes, even if your earnings are very little, you could still stack up some money for the future .

It is always a good idea to start saving even a small amount of money for your emergency fund. However, as I have said, it may not be feasible for everyone, particularly for those who support their families financially and have no one to turn to for help with daily needs and monthly expenses. As a result, they may not be able to save enough money for their emergency fund.

I mean that it may take time for some individuals to start saving for emergencies. Even if it's the start of a new year, it's not always possible to begin saving immediately, especially if you have limited funds. The key is to have a plan and choose the right timing to make it feasible, particularly for those who are only able to cover their monthly expenses with their salary.

[junder]

It is always a good idea to start saving even a small amount of money for your emergency fund. However, as I have said, it may not be feasible for everyone, particularly for those who support their families financially and have no one to turn to for help with daily needs and monthly expenses. As a result, they may not be able to save enough money for their emergency fund.

I mean that it may take time for some individuals to start saving for emergencies. Even if it's the start of a new year, it's not always possible to begin saving immediately, especially if you have limited funds. The key is to have a plan and choose the right timing to make it feasible, particularly for those who are only able to cover their monthly expenses with their salary.

That's right, some families or people may still not have a job or a steady income, so for their daily needs alone they are already difficult, therefore maybe they cannot save for an emergency fund and there are still many families who do not have a stable regular income.  So let alone saving for an emergency fund for their basic needs they still have problems. 

If they already have a job with a steady income, and even though the salary is only enough to cover their basic needs,  maybe they can force themselves to set aside a little from their monthly income, but no one knows that maybe those who already have a steady salary still always feel short. Therefore, it is important for them to be able to manage their finances well.

[lizarder]

1. NOT HAVING AN EMERGENCY FUND

How can you have an emergency fund if someone does not have a good job and that is why it is necessary to prepare for income maturity so that it can be far more stable with fixed expenses for the needs of daily life.

2. NOT INVESTING

Not investing is not a problem but a person must have other financial plans, such as running a business or job that is more productive because not everyone is involved in investment but their financial structure can also be better than people who undergo investment.

3. OVERSPENDING  

This is a big problem because if someone is unable to live in simplicity, it will make his life even more in trouble. Excessive spending money can make the financial structure more problematic because we are not able to compensate for cash flows that enter with a cash flow that comes out. If this is the problem then people must try to live with suitability and buy something only based on needs not to fulfill the style.

[oktana]

Not having an emergency fund is something that even I am guilty of. Honestly, it seems like there’s always a problem that money needs to solve and that’s just how life is. But I totally understand the importance of having emergency funds because you’d never know what will happen in the next minute. However, I am actually investing my money and I do not overspend. Even when I purchase things, I ensure that I really need them before buying. And for tracking expenses, this may not really be needed if you don’t feel like you’re overspending nor like your money goes down too quickly. But then, it could be necessary for further reference too. Well, I do not do it.

[bitgolden]

Having your money make you money would be the solution to all of this. I know that people do not like proof of stake coins all that much but that is exactly what you need. In a world where you need 1k per month to survive, ETH is giving about 5% which means that in about 240k dollars invested into it, you would be making 12k per year, and yes 240k is a ton of money and majority of the world do not have it, in fact you would be in the 1% top richest people in the world if you had 240k, but also it is not impossible in the crypto world neither.

You can ask around and you will hear a lot of stories of people who did not have anything remotely that much, had a few good investments in a few bull cycles and found that money. It could be some other way as well of course, but you need to guarantee some income, even if you are out of work.

[mirakal]

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.

If you don’t live within your means, you will always have financial struggles every now and then. Hence, budgeting is a wise move so you can track your expenses and determine how much you are supposed to spend. If you follow strictly what’s in your budget, then you will not be tempted to overspend and buy unnecessary things that will only waste your money and even your time.

Everything will be possible as long as there is discipline. You have your goals so you should stick to it and never create another goals. Take one step at a time, you will end up having good amount of finances if you target your goal and work on it.

[STT]

Good basic advice, easy to agree with.  The most expensive money you could ever encounter is the money you dont have when you absolutely need it and you can bet all the prices for that money you dont have have immediately go to the highest possible.  When you are an optional customer, deciding when you want to buy or not and the company has to win your business then you have the power and very likely the price becomes very low.    So the idea of having spare cash, calculating bills to avoid a rush is all a play on that idea.   Dont let them corner you and force a bad price on you, its how poor people stay poor sadly so very easy to fall into this trap.

[bitLeap]

Not having an emergency fund is something that even I am guilty of. Honestly, it seems like there’s always a problem that money needs to solve and that’s just how life is. But I totally understand the importance of having emergency funds because you’d never know what will happen in the next minute. However, I am actually investing my money and I do not overspend. Even when I purchase things, I ensure that I really need them before buying. And for tracking expenses, this may not really be needed if you don’t feel like you’re overspending nor like your money goes down too quickly. But then, it could be necessary for further reference too. Well, I do not do it.

Yes, there are probably many people who don't realize that an emergency fund is a must-have, usually those who don't realize it are people who haven't felt something urgent. But don't confuse emergency fund and investment, because I also still see people who still equate it, they still think investment can be used as an emergency fund too, yes it can be used but it has risks too. Just imagine when our investment is in a loss, is it worth selling? I think not. I personally always separate the two, because I have to anticipate things that look trivial but have a very big impact.

[harapan]

1. NOT HAVING AN EMERGENCY FUND

2. NOT INVESTING

3. OVERSPENDING

4. NOT TRACKING EXPENSES



Not having an emergency fund is something am always concerned about.
  Emergency fund is money set aside to cover life's unexpected events.Having an emergency fund helps to soften the feeling of been unemployed,it helps someone to retire comfortably without having fears of what life has to throw at you in the future.

The purpose of an emergency fund is to set money aside for unexpected financial emergencies and to provide a sense of financial security for yourself and your family.At every point in someone's life,there's something that needs financial attention and support.
 "You really want to make sure you keep your emergency fund for emergencies that must be addressed right now,"ensure that you start now.

[nara1892]

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.

If you don’t live within your means, you will always have financial struggles every now and then. Hence, budgeting is a wise move so you can track your expenses and determine how much you are supposed to spend. If you follow strictly what’s in your budget, then you will not be tempted to overspend and buy unnecessary things that will only waste your money and even your time.

Everything will be possible as long as there is discipline. You have your goals so you should stick to it and never create another goals. Take one step at a time, you will end up having good amount of finances if you target your goal and work on it.

True, but unfortunately I see most people today are more concerned with lifestyle than simplicity that can make them feel comfortable in life by only buying something that is needed and there is no budget allocation for something that is not useful or just for style. It is very clear that in any case management will always be the main and most important thing for a balance especially when it comes to finances.

On the other hand, in my opinion, the problem is that people today are always fooled by the name of needs and wants, almost always confused because of the difficulty of distinguishing, such as buying something that they think is a necessity of life when it is nothing more than a desire and does not have any benefits in the long run, one of the reasons is that environmental factors are quite influential, such as maybe if they have an environment that always lives glamorously such as joining some rich people but they themselves are at an intermediate level in financial terms then obviously budget allocations that are actually not needed or not really needed can occur, such as maybe buying an Iphone just to keep up with the style of their friends who basically they can't afford to spend money on it, as a result it can really disrupt their finances and lose balance for the real needs of life.

[demonica]

I agree with what you've listed especially for emergency funds. People often disregard this so when emergency occurs, it's hard for them to find funds. Since it's emergency, we never know when we'll be needing money so it's better to always have one. One great example is the pandemic. We never really expected the lockdowns will last longer so people who have no emergency funds struggled looking for money to use during those times.

Also, I think tracking expenses is a great thing. Tho I don't really do this since I'm not that organized but it could be very efficient if you really want to closely monitor the outflow and inflow of your money.

[franky1]

its worth noting, that its best to try to set up a second account with a different bank for the emergency funds for these reasons:

1. if main income accounts bank freezes the account they also freeze accounts associated with account holder they hold.
2. if main income accounts bank has a internal error problem or does a bank run.
3. if bank wants to close account spontaneously, access to funds can be delayed from that bank

so by having spare funds with a different bank increases success of having money available in an emergency

[CODE200]

1. NOT HAVING AN EMERGENCY FUND

2. NOT INVESTING

3. OVERSPENDING

4. NOT TRACKING EXPENSES

This all boils down as to how much you're spending and how much you're earning, not having an emergency fund is a poor man's thing and there's a lot of poor men out there so that's such an insensitive shit to say that everyone needs an emergency fund. Again, not everyone has the extra money to spare when it comes to investing and so they can't do this because they have a hard time already just living by and surviving daily.

The overspending I can agree that it's a problem and a mistake that needs to be corrected as quickly as possible because overspending disguises itself as if you really need that thing so you go above and beyond in your spending which ends up with you having to make a lot more financial mistakes like bad loans. The last one I can definitely agree with that, if you actually do that tracking of your expenses, you can easily solve that overspending issue that you're having.

[idarasun]

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.

You are right, it is important to be aware of our spending and our ability to manage our funds wisely in order to achieve financial success. And discipline in managing finances will help build strong foundational habits for investment and growing wealth.

[AnonBitCoiner]

Yes, there are probably many people who don't realize that an emergency fund is a must-have, usually those who don't realize it are people who haven't felt something urgent. But don't confuse emergency fund and investment, because I also still see people who still equate it, they still think investment can be used as an emergency fund too, yes it can be used but it has risks too. Just imagine when our investment is in a loss, is it worth selling? I think not. I personally always separate the two, because I have to anticipate things that look trivial but have a very big impact.

Those who don't keep emergency fund with themselves are those who don't have any responsibility so when they become a responsible person then there is a possibility that he will think about all the activities, expenses as well as about urgent needs. If you are a wealthy person still you will need money for urgent work because all the time the situation are not same.

Investment cannot be used as a emergency fund but for retired individuals it will help alot to provide an opportunity to earn monthly income. Investment and emergency funds are two different things because for urgent work we cannot take out our investment fund because the situation of market are not always alike. Same is the case that we cannot use emergency fund for investment as we know that life is unpredictable and all situations can altered anytime.