Human beings commit mistakes, sometimes these mistakes are small and insignificant other times our mistakes are so mammoth that we can easily become overburdened by them.
Spending mistakes, unfortunately come in the latter category, because once your spending mistakes get out of hand, things can really snowball from there and it is just a moment later that you come to realize that you have in fact placed yourself in a bleak situation.
Spending mistakes are serious which is why you need to control them before they get out of hand. The declining economy is actually forcing a lot of people to make even more mistakes, yes, spending your money is not a bad thing but you need to do this properly to make sure that you benefit the most from its.
A few common financial mistakes that you are likely to commit and some of their solutions to help you survive are mentioned below.
Mistake # 1: Excessively Spending Your Money
Every dollar, scratch that, every cent that you take out of your pocket affects your overall financial condition, because, when it comes to money nothing is minimal and everything has an impact on you.
Look back at your spending habits and then try to figure out if you are spending more on items that you could easily spend less on. For example how many times a week to you dine in fancy restaurants? If the number exceeds 2, then you are excessively spending your money and you need to cut back on your spending habits.
Try to hold back on spending a lot of money, instead of going for luxuries all the time go for spending your money mostly on necessities.
According to a survey conducted by Pew Research Centre the items that Americans consider as necessities has grown in the past. For example 33% of Americans now think that cable TV is a necessity and not a luxury, in 1996 this percentage was a lower 17%.
3 % of Americans even think that owning an iPod is a necessity.
It is made clear by the survey that our list of necessities has in fact increased, this is not only true for Americans but for the rest of the world as well, and this is more than enough reason to think logically about your purchases, because really every single dollar counts.
Mistake # 2: Spending Borrowed Money
If you have arrived at a situation that you have had to borrow money, only spend it for the bare essentials, this of course doesn't include the newest cell phone model nor does it include other hefty objects.
Also try to keep your credit card interest rate to a minimum; nobody is stopping you from using your credit card just don't use it for quickly diminishing items such as gasoline etc.
Mistake # 3: Purchasing Items You Can’t Afford
Everyone likes owning nice new things, who doesn't want to own a new house or a new car, sadly, not every one of us is born with a silver spoon in our mouths and so we really can't afford everything that our heart craves.
If you are able to come to terms with this one truth about the financial world then you are better off than a lot of others.
Purchasing real estate is a good investment decision, but if your current financial condition doesn't allow you to pay all the mortgages on the property or pay the maintenance costs then you shouldn't even be considering buying an expensive house, because it's likely that you'll suffer from severe buyer's remorse after you've done so.
If you can't afford to do something, don't think about doing it. You can venture back to the decision after you've required the sufficient financial funds.
Mistake # 4: Getting yourself into a lot of Payments
The catch with acquiring things is that you also have to pay for them and sometimes we can get ourselves entangled into paying a lot of payments that of course can have a severe burden on our finances.
If you're already making payments for a cell phone, get rid of your pager (in case you're not a doctor). Can't afford your cable TV payments right now? Then forgo your cable for the meantime, get it reinstalled after you're in a better situation to pay the bills.
No one likes “Last Notice” stamped on their bills!
These mistakes might seem commonplace to you now, but, these are the exact mistakes that escalate into financial disasters. Try to keep yourself from committing these mistakes and chances are you will enjoy a good financial future.
