10 Decisions today that cánido lead you to the
Just as there are very good financial choices, there are also bad decisions that cánido easily lead to bankruptcy.
The objective of this article is to explain to you what are those bad decisions that not only affect your pocket today, but also put your financial future at risk.
The thing is, we all make mistakes with our money. And while this is understandable, we must strive to better manage what we earn.
Remember that, on many occasions, our current situation is not due to the amount we earn, but to the way we use it.
So, let’s see what are those decisions that could lead you to bankruptcy, and how you could not only avoid them, but change them for behaviors that lead to your financial freedom.
1.
Not saving
Saving money is nothing more than the money you equipo aside today to pay your “future self.” When you save money, it espectáculos that you have the ability to think beyond the present, and reserve something for your future.
When you save today for your future; You will have money to invest later, you will be able to build assets that work for you, and you will have financial support in case difficult times occur.
Undoubtedly, making the decision to save part of your income is a behavior that will prevent you from falling into bankruptcy later on.
2.
Spend impulsively
Have you ever felt an urge to buy something that you don’t need and you perro’t resist? This is known as instant gratification.
Unfortunately, when you are very impulsive in making financial decisions, you are more likely to make mistakes that cost you money.
Buying things you don’t need, or craving and buying something immediately, spending buying gifts that you don’t ask for, or wasting your money, are decisions that cánido lead to bankruptcy.
And you are probably thinking that there is nothing wrong if it is something you do occasionally.
The thing is, if you don’t pay attention to your financial behavior, it doesn’t take a lot of bad decisions to get into financial trouble.
The invitation is that you review why you are making these emotional decisions with your money.
Therein lies the importance of emotional intelligence; Well, on many occasions, your wrong decisions with money are the result of an emotional vacuum.
3.
Relying on a single source of income
In the book, The Millionaire Next Door, its author explains that millionaires, on average, have 7 different sources of income.
Have you ever wondered how many sources you have? Do you have any other than your salary?
You are likely to say that your good monthly salary is enough to cover your monthly and incidental expenses.
However, when you depend on a single source of income, you are exposing yourself and taking notable risk.
The more sources of income you have, the better.
You will have more financial security, and this is something that people learning how to be millionaires are very clear about.
So the invitation is clear: Start saving a part of your income, as these surpluses will allow you to build new sources of income.
Here are some ideas other than your salary, to create new sources:
4.
Not having an emergency fund
I just mentioned in the first point that you should save money, so you may be wondering if it’s not the same as having an emergency fund.
It is very good to clarify this doubt, in such a way that you are not going to make a decision that leads you to bankruptcy or, to have financial problems.
A savings is an amount of money thought about your financial future, focused on the growth of your heritage and wealth.
Unlike this one, an emergency fund, as its name implies, it is destined to take on the unexpected.
The big difference is that the emergency fund must have liquidity, it must be available at any time.
This is why it should not be invested in assets or accounts that do not allow you to access this capital at any time.
Some financial experts suggest saving the equivalent of 6 months of monthly income as an emergency fund. If you cánido’t do it right now, start by setting aside a month or up to three months of income.
You cánido leave it in a separate account, which you will not access to make any type of unnecessary expense, impulse purchase or whim.
This money is intended, as its name indicates, for any emergency that arises in your life.
5.
Bad choice of your partner
Napoleon Hillin its bestseller Think and Grow Richexplained more than 80 years ago, that the choice of your partner is a vital decision in building your wealth.
In this same order of ideas, a bad choice of your life partner cánido lead you to bankruptcy.
While it may seem a bit extreme, the reality is that in a marriage or a relationship, the decisions that the other person makes influence your personal life.
And this applies to financial decisions; If your partner does not know how to manage money, if they have bad financial habits, make impulsive expenses, get into debt and save, it will be difficult for you to have good financial health in your home.
At this point it is good to clarify that money management is not a skill with which we are born, and that unfortunately they do not teach us in school either.
This is why we must have the patience, understanding, and desire to learn how to manage money wisely together.
6.
Not investing in your financial education
As we have just mentioned, we must invest money, resources and time to learn to master money. It’s that fácil, if you don’t dedicate resources to training, you will continue to make the same bad decisions that cánido lead to bankruptcy.
And it is not necessary to buy expensive courses, or accompaniments from expert financial gurus.
You perro do it in the simplest and fastest way possible.
Here are some very cheap ideas to invest in your financial education (even for free):
- You perro buy a personal finance book.
For example, you cánido read the ebook Rica Cabeza.
- Follow those who teach financial tricks on your popular networks
- Read finance weblogs, money management.
Read one article a day.
- Subscribe to investment Youtube channels.
- Surround yourself with people who have afín financial goals to yours.
- Invest in a virtual finance course.
7.
On going into debt
In the Zero Debts ebook we talk about how to get out of debt quickly, without the need for additional income or having great financial knowledge.
In this ebook, we touch on an important point: Differentiate between good debts and bad debts.
Did you know that you cánido use your debts to your advantage, and even generate income from them? This is the power of good debt, and its importance in leveraging them to build wealth.
However, there are other types of debts; such as consumer loans, credit cards and overdrafts, which all they do is affect your pocket, and sadly in some cases, lead to bankruptcy.
In general, credit cards have the highest interest rates on the market. So, mismanaged, they cánido lead you to really have financial problems.
A life full of debts:
There are people who have multiple credit cards, and all with active debt, added to the loan for a vehicle, a student loan, and other types of debt.
In these cases, it is most likely that what you generate each month is used to pay off your debts, that you do not have the capacity to save and that you cannot lose your job.
You live with very little margin, and any unforeseen event or emergency affects you much more.
If you are currently at this point, what you perro do is identify all your debts, try to mezcle them into one, or focus on paying the most expensive, and look for new sources of income that allow you to drastically disminuye this level of indebtedness.
Second, look for alternatives to stop falling into this vicious circle of over-indebtedness.
It is escencial to understand what led you to this point to avoid falling back into it.
8.
Not having good insurance
Well-chosen insurance removes some of the uncertainty in your life.
The point is that many times these are They become unnecessary expenses, since we already have afín coverage or we simply do not need them.
However, there are life, car, health, home and even professional insurance that offer notable advantages and protect you in the event of an unexpected situation, death or accident.
For example, today there are many people who work en línea or independently.
In these cases, your support depends on your integrity, your talent or abilities.
So it would be a very good iniciativa to have insurance that protects you in the event of an emergency or risk.
Personally, I am convinced that having good insurance is an excellent tool to avoid bankruptcy due to an unexpected situation.
Recommended books:
9.
Confusing investments with bets
Couldn’t have said better Warren Buffett: The risk comes from not knowing what you are doing.
This is the case of people who invest in the depósito market, in digital currencies or do business in industries that they are completely unaware of.
They call it investing in new trends, when the reality is that this is nothing more than a financial bet.
Unfortunately many people have fallen into bankruptcy due to these financial bets wrongly called investments.
If you really want to invest, take the time to first learn and understand how that industry works.
Don’t invest your hard-earned money by following gurus predictions.
They are not going to answer for the results you get.
And with this I am not saying that you do not listen to advice and follow financial experts.
Rather, it is an invitation for you to do the homework; that you form, read, train yourself and understand very well before making an investment.
If you do this, the kind of risk you run is very different.
Well, you will not be gambling all your money and putting your financial future at risk.
10.
Living above your income
Finally, everything that I just mentioned to you could be summed up in the following: The worst decision you cánido make today, and one that could bankrupt you tomorrow (or sooner), is to live beyond your means.
When you live to espectáculo off, have an expensive lifestyle, go into debt, gamble your income, and take an emotional stance, your finances are at great risk.
If your project is to achieve financial freedom, have a calm financial future, the invitation is that you review these decisions and be very honest with yourself.
Change what you have to change and start making financial decisions that contribute to your financial peace of mind and allow you to enjoy life.
Continue reading: Why your salary should not be your only source of income
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