Money Mistakes That One Should Avoid
If you want to start building a solid financial base, Money Mistakes That One Should Avoid. This article reveals the mistakes that are usually made while starting a venture with a solid financial base, along with the avoidance strategies!
It is a very common mistake that is made while starting a business, i.e. Failing to plan for our medium-term expenses. Medium-term expenses mean the expenses that are more than a month out, but still coming up in the sort of near future. Most people are very well aware of the fact that you have to pay rent at the end of the month. And, you can have many other monthly expenses, you might have to buy groceries every single month, you might have educational expenses, etc.
But what most of the people might not be as aware of is the fact that maybe three months down the line, you have got to buy textbooks for your next semester! Or that a holiday is coming up and you might have to go on vacation! A lot of people do not think of these medium-term expenses and they can get them into trouble.
This is why it is important to frequently look ahead and ask yourself the question, ‘what is coming up in my life?’ Take this as a mindfulness practice. Think about all your life’s dependencies and what you are going to do in the medium-term future to make sure that they are all going to continue to run smoothly and that you are prepared for any expenses that they might bring.
The What-If analysis
The other common mistake is ‘making big financial decisions’ in your life, without running a what-if analysis. This basically means that you take the data that applies to your current financial life and then you ask ‘what if?’ And you ask it using data. You ask what would happen if someone would say, bought a new car or got a new job?
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A lot of people jump into these big decisions without actually seeing what they are going to do with the numbers that run their financial life. The what-if analysis will let you analyze the total amount that you are investing, spending on houses and all sorts of other useful things. You can put all your income sources in this what-if analysis and analyze the complete situation of your financial health!
These tips will surely help you manage your money in an effective way so that you can have more savings rather than more consumption of money!