It’s a new year and more often, it refers to a fresh start for everyone. This is a good time to learn from financial mistakes that you made in the previous year and avoid repeating the same in this new one. We all make financial mistakes in our lives; but, what is important is learning a lesson from your mistakes and not repeating them as far as possible.
“It is fine to celebrate success, but it is more important to heed the lessons of failure,” – Bill Gates.
In this post, we will be sharing five financial mistakes that you should avoid in this New Year to secure your future and live that financially free life you have always wanted.
Mistake 01 – Having NO Financial Plan
Failure to plan simply means you are planning to fail and as much as possible, not having a financial plan can make your goals with regards to savings, investments and even spending a very daunting task. In order to enjoy financial freedom, it is pertinent that one of the steps you must take is to have a financial plan and work with it. Having a financial plan can be different things but to meet up with your financial goals and plan effectively, one of the things you can do is to create a financial budget.
Budgeting is a very efficient and effective way to help you arrange your finances properly as well as avoid unnecessary wastage and spending. It can help you maintain discipline and instill good financial management habit in you.
There are a couple of Apps online that can help you budget and plan your finances which will influence and most likely increase your saving and investment habits.
Mistake 02 – Not Building Your Knowledge on Financial Literacy
These days, it is dangerous to assume that you already have all the knowledge you require when it comes to financial literacy considering that these times are uncertain so in order to stay pink with your financial health, you have to be open to learning new ways of improving your financial knowledge. There are so many websites and Apps that can aid your financial dispensations and help you make very good and informed financial decisions.
At questergate we share information that is relevant and vital to helping you build and manage your finances effectively. In order not to become a victim of poor investment judgement and repetition of financial mistakes that can lead to very huge consequences, stay open to building your financial literacy and gathering information from legitimate sources that can help you keep track and stay abreast with trends that are relevant to your financial health.
Mistake 03 – Accumulating Debts Being in debt is not bad but not having the capacity to repay it on time is harmful to your financial health. A lot of people are in this situation, having to deal with multiple debts and yet not having enough income sources to be able to manage these debt repayments which is very dangerous and can be a really worrisome situation. However, in 2022, you want to avoid having more debts than you can repay, staying on top of your game by multiplying your income source. Read up ways by which you can increase your income source here. Also, keep in mind, more debts imperil your ability to save and invest more so ensure to make really wise choices.
Mistake 04 – Inadequate or No Emergency Fund
Emergencies can strike at any time and often come with several financial complications. The COVID-19 pandemic is a very significant example that has taught us to be prepared for any emergency. Not holding an adequate emergency fund (rainy day fund) and having to face unexpected expenses may require that you borrow money (which may create a debt burden for you) or end up utilizing investments/assets assigned for some other vital financial goals. Therefore, to avoid such a situation, open up an account or profile to fund your emergencies in this New Year; it should contain at least 12-24 months’ worth of living expenses, including loans, if any. As the year progresses, be consistent with deploying some amount every month into a recurring deposit or into a separate savings account to plan for your emergencies.
You can equally re-evaluate your emergency fund whenever your circumstances change, either when you get a new job or bring a new member into your household or even change status generally. Due to lack of emergency funds, many individuals suffered and are still suffering amid the pandemic, and are trying to recover from the financial instability. However, an emergency fund would help you cover those unexpected expenses.
Mistake 05 – Making Wrong Investments
Another common financial mistake made is investing in avenues that are not agreeable with your risk profile, investment objective, financial goals, and time in hand to achieve those goals. So many investors make the mistake of investing in financial products that they do not understand as many copy what friends/relatives/colleagues/neighbors do, and in the bargain end up making unworthy and unsuitable investments that erode wealth.
Here at questergate, we do it for you by helping you invest your money in low to medium risk investments that guarantee that both your capital and returns on investments are safe and secure!
What Financial Mistakes do you want to correct in 2022?
Did you find this post helpful?
Share your thoughts!