Hey, Flexxer! If you went broke more times than you could remember last year due to your bad financial decisions, we’re here to rescue you. In the spirit of new beginnings, it’s time to let go of certain habits.
While there is an exhaustive list of things you should avoid doing with your money, here are five things you should take note of, this year.
Seriously, avoid doing these things. Don’t say we didn’t warn you:
Investing in opportunities you do not understand
If one of your New Year’s resolutions is to invest and grow your money this year, you’re on the right track. However, before you make any investment, it’s advisable to do some in-depth research into the investment opportunity and the organisation behind it.
There are several fraudulent schemes at naive investors, and it is important to ensure that you do not fall into the bait. These fraudulent opportunities often mask as lucrative opportunities offering high returns to help you get rich quick, so stay woke and don’t ‘lose guard’.
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Letting your feelings drive your spending habits
Our emotions tend to take the best of us when we do not control them. When we’re sad, you could end up buying things as some form of retail therapy- to help us feel better, even though we end up regretting them later. When we’re happy and excited, we tend to buy things on a whim, sabotaging our money goals in the process.
The truth is that these emotions are sometimes fleeting, so letting them dictate your actions is a big mistake. This year, try not to get emotional when it comes to your expenses. Think rationally and exercise self-restraint.
Turning a blind eye to your expenses
In other words, do not lose track of your money and personal spending. If you often find that you are unaware of how much you spend on a weekly or monthly basis; or you can’t explain how money leaves your account, you need to fix up and find a way to keep an eye on your finances. Create a budget to help you manage and track your expenses, and digitalize your personal finance by using savvy apps.
Lending money without planning for it
There’s nothing wrong in giving your friend or family a helping hand when they are short of cash, but it’s important to do so wisely.
Firstly, if you can’t trust someone, don’t lend money to them. While you can’t always vouch for a person’s character (and people can switch up anytime), you can assess your personal history with the person and take note of any red flags.
Secondly, when lending money, ensure you put a repayment plan in place. Agree on a specific date for repayment and discuss what form the payment will take (monthly instalments or complete single payment).
Thirdly, before lending money, determine how it will affect your current finances. If you have to go beyond certain limits, you should probably agree on a more convenient amount of money, or avoid lending at all.
Spending it on things you cannot afford
In a bid to keep up with your friends or own the latest things, you might have made some purchases you couldn’t afford last year, leading you to experience buyer’s remorse. This year, be more intentional and your expenses. Before spending, ask yourself some critical questions, look for more affordable alternatives, or save properly towards the expense. If that expense is going to leave your account on ‘red’ and it isn’t an urgent need, it’s advisable to forgo it.
What are some other things you’ve learnt not to do with your money? Let us know in the comment section below!
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