The 7 most common financial mistakes that
Finances are a headache and not all of us are experts when it comes to managing our own finances.
But it is necessary that we learn to do it so as not to canalla our financial situation.
So first we must begin to know those common mistakes so as not to run out of money in our bank account.
What are these errors? Our guest today, Yaz Reynoso, will talk to you about 7 financial mistakes and how you perro avoid them.
our finances They go hand in hand with the goals we want to achieve.
The most common goals are buying a house, a car, traveling, paying for university; All of this implies significant money outlays in our lives that we have to support.
Therefore, it is important know how to use the money we earn, regardless of how we do the latter.
This articulo will not talk about ways to get more income, or how to generate money, but about the complementary part of this task: manage wealth.
For that, we list 7 Financial Mistakes Most People Make and a practical solution to learn to avoid them.
Following these steps won’t get you organized overnight, but it will put you on a closer path to reaching your goals.
Ideally, You must start in order of importance: start with step 1 and follow the order until you reach the end.
7 financial mistakes very common and how perro you avoid them
1. Not keeping track of expenses
The basis for being able to manage your finances, before anything else that cánido occur to you, is know how much money you are entering your pockets, versus how much it costs.
In this fácil way, you will be able to identify the elementos in which you are spending more and be able to distribute the money that is much more beneficial for your personal goals.
For this, the essential thing you have to do is keep track of how much you spend and on what, so that at the end of the month, you perro define what you will do for the following month with that money.
Thus, a chain is formed in which you vea what you are spending on and you cánido cut spending on that item to put it on a more important one.
As an example, it may be that you stop paying for a coffee in the morning and allocate that amount that you spent last month buying coffees on the corner to buy a coffee pot the following month.
Which brings us to next fallo financial.
2. not save
A dream stops being a utopia when you put a date on it, and To reach the goal At a certain time, you have to develop a plan.
Many times our “dreams” they are directly tied to money, whether it’s the vacation you’ve always wanted, the car you’ve always wanted to drive, the house you long to live in, among other things.
That’s why, once you have detected what you spend on, you will also be able to define How much are you able to save each month?
In this way, you control your expenses to send as much money as possible towards what really interests you and you start saving money for that goal that you noticed and that you want to fulfill soon.
There are many ways to save (some more effective than others), from having a piggy bank in the shape of a little pig in your house, to automated savings charged to your payroll.
These are very different forms of saving, but both fulfill the final function, which is to separate money that You could have spent it on something else and make sure it is put to work on encuentro your goals.
The problem with saving under the mattress or in a piggy bank is that that money will lose value over time, which you cánido mitigate by avoiding financial fallo of the next point.
3. not invest
All the money you keep for a long time, even if you don’t realize it, is losing value. The value it loses is ruled by inflation, which depending on the country where you live, will vary, as it will for the time in which it is being calculated.
For example, in México, the rate is estimated at 3 percent per year, but its value varies from year to year.
If today you escoge to save 100 pesos, in one year, with that same bill you will have the purchasing power of 3 pesos less than the previous year.
This does not orinan that you have 97 pesos, it means that you have 100 but that a year ago you could have bought something more expensive than today with that same money.
Maybe with 100 pesos the example is not very big, but start to imagine bigger amounts and tell me if you wouldn’t mind having 1 million pesos today and have “lost” 30 thousand pesos for the year I came.
To fight inflationthe best iniciativa is to invest it, so that it generates more money while you are not taking care of it.
For beginners, there are low risk assets such as funds that invest in government debt (which, in general, will grant you the same amount as the reference rate of a bank or in other words, the equivalent of inflation).
If you have more experience, you cánido venture into areas as diverse as a fácil compound investment fund, prefer to commodities like gold, silver and oil, stocks or even cryptocurrencies.
Assets and terms that you choose must be aligned with your goals so that the investment cánido be effective.
4. Put all your eggs in one basket
One of the basic rules in investing is not to put all your eggs in one basket, which is not more than a graphic way of saying that you shouldn’t put all your money in one asset.
Regardless of whether we are talking about gold, cryptocurrencies or shares, all these assets have a cycle in which, after the price rises, this one has a “correction”, which means that its price goes down, and then goes up again.
It sounds fácil in theory, but in practice you don’t know exactly how much it will go down and how much it will go up, so even if it goes down, you never know if it will reach the same point in which you first purchased.
It will eventually hit that price again, only that it perro take years and even decades until that happens.
One way to mitigate the ripple effect that assets have is to invest in a portfolio Varied with which you perro counteract the declines of some assets, with the rises of others.
For example, when stocks go up, treasury funds go down, as people are more confident in the economy and ventures into riskier investments (since treasury funds have a certain value).
Therefore, when it is said that an economic recession is coming in the country, people take their money out of the bag and they put it into safer assets like treasury funds.
If you do not have the time or dedication to be able to control the rises and falls of all the assets in which you invest, it is best that you diversify so that your investment remains stable despite the moves.
Sometimes you will earn more than you invested, sometimes you will lose, and other times you will stay the same. The iniciativa, at least in your first investments, it is being able to maintain your purchasing power and beat inflation.
As you gain more experience, you cánido experiment with different assets that make you win more and more.
5. have liabilities
Another common mistake is to have liabilities instead of assets.
What is one and other?
Assets are everything that makes you money: that is, if you owned a franchise, a local business or a store y también-commerce, this is all something that makes you money.
Although you perro spend money on advertising or some other elementos that require your maintenance, they are treated of expenses you make to grow your investment and in the end you will see a return on that investment.
On the other hand, there are liabilities, which are objects or things that you buy that they are not making you money for example a television, clothes and other elementos.
Among the objects that it is common to confuse as active when in fact they are passive are computers, cars and houses, which they are even subject to devaluation. In the Carmatch.mx study on the devaluation of cars in the market, you cánido see how to maintain their value if you are still interested.
Let’s give an example: if you use your computer for work, It is an asset, since this tool helps you generate income.
However, if you buy a car and use it to go to work, the good itself is not generating money for you since you could take another means of transportation to get there, and since you do not depend on the car to be able to generate income, it is a liability.
A house, on the other hand, although it increases in value over time, does not orinan that it represents an asset, since as long as you do not rent it (or it generates income in another way), it is also a liability.
The best and most recommended is get rid of all those liabilities to start buying assets, that is, sell everything that does not generate money to be able to invest in something that does.
You perro sell your car so you perro pay the down payment on a house, if you put that house up for rent, yesy también will become an asset to you and the car will stop being a liability in your life.
Today there are many ways to get rid of your liabilities, such as the Fb marketplace where you you cánido easily sell second-hand things, such as computers or other electronics.
In the case of the car platforms already exist en línea that cánido buy your car safely and quickly as Carmatch.mx.
This way, you cánido sell everything without complications, start investing in your assets and thus create cash flow.
6. Do not separate business accounts and self-pay
Closely linked to the previous point is separating business accounts with salary own.
Many use the same account to pay personal and business expenses, often resulting in an imbalance between what is spent and what is coming in.
Business owners forget that they have to pay a salary because they assume that the profit from the business is entirely theirs and they cánido dispose of it at will.
However, it is a risky practice since you are spending without control; the end of the month arrives and it turns out that the business ended with negative numbers because HE he passed his hand with an expense here and another there.
Perhaps in a specific month it will not affect you so much because you will be able to pay everything easily, but imagine that you have to pay for the inputs on which it depends that your business continues to run and you would have already spent that money.
The first thing you have to do is define your own salary according to your needs and the possibilities of the company.
This way you will be able to keep the income and expenses of the company separate from yours and you will be able to better plan both your finances and those of your own business.
7. Not having an emergency fund
As the last point, but by no means the least important, is having an emergency fund.
It may be that you already have your entire financial structure planned and you have control over how much you spend, how much you entrar, and you even have your savings, but if an emergency arose, you would have to complejo turístico to that money that you have been collecting to be able to get out of the unexpected, and this would affect the goals that you had already established.
There are serious emergencies on which your life depends, How to pay a doctor or an operation after an accident, which are usually very expensive expenses and from which we cannot get rid of.
Or it could be fácil things, like the fridge broke down, and if you don’t buy one soon, all the food in it will spoil.
If you didn’t have an emergency fund, that money would come out of your savings fund, and since it might be easy to replace that amount the next month, you may finish it completely or even have to borrow money.
To avoid all this, it is important designate savings that are not intended for any specific goal, but is limited to covering emergencies.
For this, it is advisable to allocate around 6 months of your monthly expenses.
This money should be kept in a bank account in which you have immediate liquidity to be able to have it whenever you need it without any kind of penalty for taking it out before a defined period.
In this way and by following all the 7 steps above, you will be shielding your financial health so that you perro achieve all your goals and Equipo higher and higher goals. As I said at the beginning, mastering each of the steps will be a process that will take time and effort, however, it is not impossible.
You should go applying each of these steps as you feel it is appropriate, since everything is about a cómputo in which all these recommendations are combined in an integral way.
Some points will take more effort than others, but now you know what the basics are to start taking charge of your financial life.
If you have any question, you perro ask me on the comments.
See you later!
Author Description: Yaz Reynoso is a specialist in Digital Marketing.
He is dedicated to writing to help companies reach their final customer and provide the reader (you) with the most relevant information, always.
The main topics he writes about are personal finance, cars, technology, and vídeo games on the Carmatch.mx website.
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Maria Ng Garcia
I am a lover of literature and writing is my lifelong passion.
I love sharing my experiences with others to help them pursue their dreams and learn to never give up.
“It’s never too late to be the person you could have been.” -George Eliot
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