There are a large number of steps you can take to help you become financially successful, but all your hard work can be for nothing if you are also doing things that undermine the financial success you’re seeking. The financial steps to success are important, but understanding the steps that will ensure financial failure are just as important, if not more so. It usually only takes a single financial blunder to wipe out any progress you’ve made. Here are 10 of these blunders you want to avoid or resolve as soon as possible to ensure the long term health of your finances.
1. Spend More Than You Make (live beyond your means): While you may be able to get way with spending more than you make for awhile, it will eventually catch up with you. At some point you will have to make up the difference and when that point arrives, your finances will not be a rosy picture.
2. Live Paycheck to Paycheck: While living paycheck to paycheck may seem better than living beyond your means, it will still ensure that you fail to meet your financial goals. Paycheck to paycheck living fails to take into account unexpected expenses that happen in life, and in life, unexpected expenses always occur.
3. Try And Keep Up With Jones’: The Jones’ aren’t who you are competing against. In fact, what they are doing and buying likely has very little to do with your own financial goals. The reason that it may look appealing is because you don’t understand what your financial goals really are and trying to keep up with the Jonses’ simply means that you will continue to not know what your financial goals are (because you are too preoccupied to try and keep up with someone else’s financial goals who are probably doing the same thing themselves)
4. Not Know What Your Financial Goals Are: If you don’t know where you are driving, the chances of you getting there are very slim. The same holds true with your finances. To succeed, you need to know where you want to be financially and creating a map to them will make it that more likely that you reach them. Not knowing what they are in the first place is like traveling following a blank map.
5. Let Money Control You Instead Of Controlling It: Money is a means to and end, not the end itself (after all, it is nothing more than pieces of paper with printed ink on it). Financial success isn’t dependant on how much you have, but rather whether you can you get what you want with what you have.
6. Don’t Improve Yourself: If you are unwilling to improve yourself, you and your finances stagnate. Improvement is a never ending process (who do you know that is perfect?) and is an essential part of your finances both in taking care of them and creating the wealth you want.
7. Rely On Others To Take Care Of Your Money: Rarely do those that are taking care of your money have the same interest as you do (they are probably interested in making money for themselves, not for you). While it is perfectly acceptable to rely on others to give you suggestions and help with financial decisions, you should be a integral part of the decision process. If you rely on others to take care of absolutely all your financial interests, you will likely be quite disappointed in the results.
8. Invest In Things You Don’t Understand: If you want to lose all the hard earn money you’ve made and start from square one again (or even in the hole), starting investing in things you have no idea about. The problem isn’t that the investments are necessarily bad in themselves, but most investments have risks. When you have no clue what you’re doing, that usually means that others who do have a clue make money while you lose a lot. No matter how much uncle Joe talks about what a great investment it is, place your money elsewhere until you are confident you know everything about it.
9. Be Financially Afraid: Just as being to aggressive can ensure financial failure, being afraid to take any risk at all will also almost always ensure it. To grow your money to meet your goals means taking calculated risks that bode in your favor over time. Not doing so will result in your finances treading water, if not sinking, and falling short of your goals.
10. Ignore Your Finances: It seems that many people believe if they simply ignore their finances, then things will get better or take care of themselves. While it is a nice hope, it’s nothing more than that and not reality. Reality says that ignoring your finances and not taking the steps that need to be taken will ensure you fail to reach your financial goals.
Avoid these financially destructive steps and you greatly increase the odds that you will meet your financial goals no matter what they are.