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5 Money Mistakes You Shouldn’t Make

Posted by : Premraj | Posted on : Tuesday, January 6, 2009

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Everyone makes mistakes with money and there are some mistakes that are tolerable but at the same time, there are also some mistakes that aren’t. Do you want to know which money mistakes you shouldn’t make?

Here are the top 5 money mistakes that I don’t think anyone should make:

1. Investing without understanding

If you don’t understand investing, don’t go head first, don’t go feet first and just don’t go at all! What do I mean by that? Don’t throw all your money into investments without research.  Avoid the get rich quick mentality and hope that your investment will hit and make you rich. Instead, keep all your money in your bank account and keep learning about what you want to invest in. When you think you’re ready, start small and watch your progress. Once you think that you can afford to put more money into investing, than you put bigger amounts and bigger until you’re entirely comfortable with investing.

2. Calculate your yearly salary instead of your monthly

Many people fall into the trap and set up their budget for yearly. They will predict their yearly progress and hope that nothing happens in the year but how long is a year? 12 months! Do you want to gamble 12 months will be entirely safe and nothing bad will happen? I wouldn’t. I would budget myself monthly and try to make ends meet in a month instead of a year. This way you’ll appreciate it when you have an emergency because when you save monthly, you’ll want to save more at the low amount of money you can work with.

3. Having high interest loans

Don’t borrow money if interest is high, instead search for other loans. I guess that’s pretty self explanatory right? I’ve seen many people borrow huge amounts of money and get into debt paying off the high interest loans for a really long time like 20 years. Don’t fall into this trap and watch the loans you borrow. All it takes is opening your eyes to the money you borrow and not be all dazzled whenever money is used.

4. Not having the saving money mentality

I’ve read of people online and on various online forums talking about people and experience of people that just don’t have the money saving mentality. They think they can just keep borrowing without any problem and expect to live their lives like that even through their 50s!

Saving money is about commitment and mindset. When you want to save money, you have to commit to saving money and have the mindset that you will save money. If you don’t have the commitment, you’ll consistently spend money. Likewise, if you have the commitment but don’t have the mindset, you’ll do the same thing. Spend money! The key to saving money is having both parts fit together, the commitment and the mindset.

Having a no-nonsense attitude will also help you but failure to do anything will hurt you in the long run by not allowing you to save the money you could.

5. Looking down on thrifty and frugality

I absolutely can’t believe the people that look down on being frugal and thrift. Thrift stores can be used to find many brand name items such as LuLu Lemon clothes or Louis Vuitton handbags. I have seen my aunts do it before and do it again consistently when they wanted to. Who would’ve thought that you can do this especially in a thrift store? After all, who donates huge brand name items right? I can’t give an answer but I know it can be done because I have seen it with my two eyes.

There’s also nothing wrong with being frugal as well. Although it is an attitude that many people consider cheap, there’s completely nothing wrong with it.  In reality, frugality is just pushing each dollar to its maximum by avoiding wasting it and by seeking low cost alternatives. A penny saved is a penny earned after all!

Here are my 5 mistakes that people shouldn’t be making. They’re incredibly simple if you are healthy financially and just require a few tweaks with your finance if you aren’t healthy financially. Enjoy these tips and get started now!

Let everyone know your advice.

This is a guest post by Trevor Chang from http://www.strikingup.com/

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