Gaining financial independence is a desire that resides inside millions of people, and it is appalling to note that even though they know what they ought to do in order to increase their chances of becoming financially independent, they will refuse to do what needs to be done. It some of the things you do today that might be hindering you from being financially free, and unless you put a stop to some of your behaviors, you may never know how it feels to not worry about money. Presented below are some of the money mistakes you must avoid if you want to work towards a better financial future-:
No emergency fund
Emergencies will never warn when they want to strike and if they find you not prepared, they can be very devastating to all aspects of your life. If you think of getting involved in a car crash and losing your ability to move or to earn income, the financial burden you will be faced with will be enormous and if you didn’t have a good amount in savings, you may consider pre-settlement funding from companies such as grapeleafcapital for some financial reprieve. What this means is that you should equip yourself with an emergency fund – a fund you will keep growing from year to year and you will touch only when there is a financial emergency and you have no other place to get any money. It comes along with a lot of peace of mind.
Having unnecessary subscriptions
There are certain subscriptions you can always do without or which you can always keep to the bare minimum. This is not to underestimate the importance of subscribing to services such as entertainment and gym amongst others, but they don’t have to be very expensive such that they may put a strain on your future finances. Check the active subscriptions you currently have and determine if you really need them or if you must have that particular package. You can save a considerable amount of money from such subscriptions, which you can then channel to your emergency fund or add to your savings.
Never asking for discounts
Asking for discounts is a form of saving and saving is a culture you should develop very early in life. Whenever possible, never shy away from asking for discounts. Most of the shops you shop from are in the industry for business and they will always try to sell at the highest possible rate, but if you ask for a discount, they may sound reluctant, but if the industry is competitive enough, they will always offer some discount.
Having a lot of money in a checking account
You checking account is not your savings account, and it is practically ridiculous to have more than $1000 in that account, irrespective of how much you are making. The checking account should be just for convenience, but the real place where the bulk of your money should be is in your savings account. With a savings account, you could be earning little commissions over time, but this is never possible with having your money in checking.
Not having a budget
A budget should be your ultimate guide on how to spend your money so that you can determine how much you can be saving on a regular basis. It is not just enough to have a rough idea of the amount of money you need for your monthly expenses, but you need to write them down and allocate a specific amount of money to each. This will bring a lot of clarity to your expenditure, and will also help you become a better planner and manager of your finances.
With a budget, you will identify all the places where you have been bleeding money through unnecessary expenses, as well as know the exact amount of money you need to have in order to live comfortably without a period of time. And truth be told, if you have been operating without a budget and you are reluctant to have one, you can as well kiss future financial freedom goodbye.
You are not contributing towards your retirement plan
It is common for people to put off saving for their retirement, and this is a great impediment towards your future financial freedom. To many people, retirement is still a long way and so there is no need to think about it at the moment. However, time flies and before you know it, you will have to give room and let others take up your position. If you had no money set aside for your retirement, this will be the beginning of your financial misery in your sunset years.
In addition to social security which is currently available to most working guys, set aside a separate account and contribute actively to it. Make it a habit and do it from now, till the day you retire. This is how you will be able to retire in peace and with good savings so that you don’t bother your kids for your survival.
No plans for getting out of debt
If you are in debt, and you desire to have a secure financial future, then you must get out debt as soon as possible. It is laughable that some people dream of being financially free a few years from today, yet they are still shackled in debt and the worst thing is that they are doing nothing about it. Figure out how you got into debt then make sound plans on how you are going to clear off those debts. You should also be disciplined enough to not get into more debts once you get out or while you are trying to clear off the debts.
If you don’t have insurance for the house, health, and car, you are priming yourself for a great financial distress should something bad happen to you, your house or your car. Insurance is a cushion against uncertain risks that might befall you in the future. It will help you from touching your savings in times of trouble and you will always remain on course towards achieving your financial independence.