Mistakes are a natural part of life. Indeed, some of our best lessons arise from them. However, when it comes to your finances, seemingly simple little blunders can have a catastrophic impact. To help you tiptoe around disaster without getting caught, take note of the following financial blunders. Each one is easy to slip into but hard to claw your way out of, so pay close attention!
Mistake 1. Not understanding debt
Whether you’re convinced that “all debt is bad” or you think business finance is the only way to get the funding you need for your startup, small knowledge gaps can blow up into big financial blunders if you’re not careful.
You may miss opportunities that could help you grow your business. You might take on financial commitments that are beyond your means. Worst of all, you might lose money in an investment scheme that you would’ve known to avoid had you done a little more research.
To combat this, it’s worth educating yourself on personal and business finance in general. From this broad and stable foundation, you can then head into targeted research whenever you’re making specific financial decisions.
Mistake 2. Not seeking professional help
Though the research and self-education recommended above are vital for your financial health, you also need to know when it’s time to call in the help of a professional.
For example, a few weeks of research may position you well for selecting your first investment property. However, it barely skims the surface of what an experienced property investment advisor understands about the local market.
Diving in without professional assistance could see you lumped with a property that fails to deliver good returns. The same is true for any major financial decisions you make. A professional will be able to steer you clear of those hard-to-spot mistakes that could cost you over the long-term.
Mistake 3. Financial stagnation
If you’ve been sitting on the same wage, project rate, or product prices for years, you’re selling yourself short. Whether you need to ask your boss for a pay rise or tactfully inform your clients of a rate increase, don’t allow the awkwardness of such moments hold you back.
Mistake 4. Being manipulated by marketing
There once was a time when ads were designed to show you the functionality of a product and people mostly bought what they needed. Then Edward Bernays arrived with a new form of marketing designed to manipulate people’s emotions and convince them they “needed” far more things than they actually did. Though his story is fascinating, his legacy is a world consumed by consumerism.
One of the first steps to freeing yourself from the manipulative strategies that cause you to overspend is unsubscribing from marketing emails. You may also wish to install an ad blocker and take a break from scrolling on social media platforms where ads are designed to look the same as user posts.
Mistake 5. Not having a plan
Since you’ll be taking a break from social media scrolling, why not put that freed-up time to good use by developing a plan for your financial future? This plan will become your guide whenever faced with decisions about where to direct your money. With it, you may avoid frivolous spending and instead nurture worthy investments. Without it, you’re far more likely to follow your whims and waste money on things you truly don’t need.
Small financial mistakes are devilishly easy to make, and their consequences can compound over time. However, if you keep the tips above in mind, you’ll be well placed to avoid the worst of them.