Money mistakes to avoid

You earn a six figure salary, but by the middle of the month you are always broke. Everyone at office knows you as the guy who is always asking for small loans. Clearly, there must be a problem with money management here. So, how can one avoid mistakes that lead to wasteful spending? Experts say money management is a learning process, noting that one is bound to meet challenges along the way. However, there are a few tips that should help you avoid poor money handling habits, setting yourself up for a successful financial future. Victor Nkindi, a senior consultant at Hooza Media Convergence, says one should identify the priorities before spending money, noting that making a list of all your pending payments could help you match expenditure and earnings to spend within your means, and also save. “Determine your financial goals and make a specific plan to achieve those goals,” he says. It is essential for one to take control of their money if they are to accomplish anything. By listing down your debts, expenditure and income, one is able to plan well using the resources available, and hence avoid instances when one is forced to borrow from loan sharks. One needs also to develop a habit of saving. Though this is not easy, start by saving a small portion of what you earn monthly and avoid impulse spending. That’s why it is essential to have a money management plan that suits your needs and to lead a financially stable life, as well as grow your savings. The trick is to never buy something that was not budgeted for, and to try and avoid situations or places where you could spend on unplanned items. Didier Byiringiro, a marketing and sales officer at Shabaky, says many people start thinking about how to get money after spending what they had instead of accumulating first and spending after. This way, one is able to develop the habit of saving, he adds. “So, it is always advisable to spend after saving instead of trying to save after spending,” he says. According to Internet sources, setting a budget goes hand-in-hand with determining your future financial plan. “It is easy to lose sight of your income versus your expenses on a monthly basis. So, it’s crucial that you take a hard look at your monthly income and your average expenditures in order to establish a personal budget,” they point out. One must also stop reliance on credit cards because they will plunge you into a debt cycle that you find hard to break out. This is not good for your financial wellbeing. So, do whatever you can to prevent racking up a large balance on credit cards. Also, always demand what you are worth, whether you run your own business or are employed by others. Though most people find it hard to discuss payment with potential employers or clients, you need to find a winning way to get a better deal than just accepting what they offer. So, never be afraid to demand what you deserve. Collins Manzi, a teller at GT Bank, says many young people spend money irresponsibly. “We tend to place a higher value on short-term than long-term benefits, even when we know the long-term is more important,” he says. He says one has to consider the money they earn and spend it accordingly; noting that using your finances to impress others is financial suicide. Therefore, do not feel pressured to use money as a tangible indicator of how good your life is. Remember, showing off is a poor money management habit, which is common among the youth who tend to buy expensive items to impress others. This is also related to reckless spending, which is basically a result of unplanned and impluse expenditure. So, make sure that you open a savings account and get yourself into the routine of putting away a certain percentage of your pay cheque. Though some have savings schemes for workers, such initiatives are voluntary. It is essential for every worker to join them and save for a rainy day, as well as secure their financial future. Additional reporting from internet sources.

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Money mistakes to avoid