Some money mistakes are easy to overcome, while others take a much longer time to repair. We all hope to one day be rich, quit our jobs, and retire early, but hardly any of us see this dream realized.
Why? Because we fall victim to common money myths, and it derails us from our desire to be rich. If you want to build wealth, here are the top money mistakes to avoid.
Mistake #1: Believing finances will fix themselves.
When it comes to your bank account, ignorance is not bliss. When you avoid facing the facts about how much debt you have, how little savings you’ve accumulated, and how off track you are financially, it’s nothing but a downward slope. It just keeps getting worse, not better. So don’t continue to ignore it.
In order to take control of your financial life, you have to know where you stand, evaluate your goals often, and make necessary changes. It’s not easy, but it will be well worth the end result when you reach financial freedom.
Many of us mistakenly believe that in order to understand money (and thus successfully manage it) means we have to be an investment banker or accountant. But that’s not true! Thanks to technology and the internet, there are simple apps and tools that help you manage money without the stress.
Mistake #2: Focusing on saving money.
Don’t get me wrong, saving money is an important part of building wealth, but you can greatly increase your efforts (and thus your savings) by focusing on earning more money instead. There’s a lot of emphasis put on being frugal, using coupons, and saving money, with little effort spent on showing you how to use your most powerful wealth building tool — your income!
There’s nearly an unlimited amount of money you can make, ways to capitalize on your income, and creative endeavours to invest in, while saving money has much more constrained limits. Spend your energy on finding ways to earn more, and focus a bit less on saving.
Mistake #3: Set it and forget it.
Maybe you created a budget last year but gave up after 6 months because it wasn’t working. Perhaps you vowed to pay off a certain amount of debt but got discouraged after a few months because you barely made progress. Sound familiar?
This is a mistake we all make with our money. Why? We think changing our financial habits is as easy as “set it and forget it” and something that will happen in a short period of time. But it doesn’t work like that. You have to constantly re-evaluate your financial goals, experiment with new methods, change your strategy, and test new ideas.
That’s the only way you’ll be successful with your money and build wealth. You have to view it as a long-term commitment, that’s needs interval check-ins, not something you can work on this week and then be done with.
Avoid These Money Mistakes
Accumulating wealth and getting rich is not a shameful goal, in fact, it can be something that protects your family and takes care of their future. Do whatever you can to avoid putting your future, and theirs, at risk by falling victim to these money pitfalls.
If you hope to be rich one day, then take action toward avoiding these mistakes or small steps to overcome them if you’ve fallen into one.