If you are constantly counting your fingers, punching the calculator and wondering where all your money is going, there is a high chance you are not doing something right. Managing your money is something that requires a lot of effort and discipline. If you are constantly broke and wondering how that is possible, below are five possible habits you probably need to keep in check;
Not Having a Budget
Feeling rich right after you are paid is a false sense of security everyone suffers once in a while. With money at hand, you make a mental picture of all the things you need to do and get right to it. Not having a budget causes you to spend more than you can afford. Or worst, you end up not having any money for the things that really matter. Budgets help you live within your means, keep track of your spending and prioritize spending money on things that really matter. Impulse buying is fun, but it is the fastest way to lose all your money.
Living Beyond Your Means
At an age where our peers pretend to have it all together, we are often tempted to impress. By buying things we cannot afford or adopting a lifestyle that constantly strains our wallet, we set ourselves up to be forever broke. Many people think because they can pay for something means they can afford it, but that is usually not the case. Being able to pay for something is in no way equivalent to being able to afford it. Affording something means paying for it wouldn’t put you on the urge of bankruptcy.
Dipping into your Savings
There is always the need to save. Whether it’s saving to buy something you can’t afford outrightly or saving some money for a rainy day; it’s highly essential. Not only does it contribute toward your comfort; it also gives you a sense of security you otherwise wouldn’t feel. Developing the habit of always dipping into your savings leaves you in constant deficit. To truly enjoy the benefits of saving, you must allow it to compound overtime. Cut back on things you can do without and allow your savings to grow with time.
Making bad Investments
Just like savings, investments can be very rewarding. However, bad investments are a huge headache. They wash away years of hard work and make you broke real quick. It is therefore important to make very informed decisions when you decide to invest your money. Thorough research helps a lot, so does speaking to financial advisors who know what they are about. Ponzi schemes are usually frauds painted as investments. Anything that appears too good to be true is probably not worth the try. If you must, take the time to investigate first.
The gambling industry rides on people’s false sense of luck to make billions annually. Making a habit of gambling is the quickest way to plunge into debt. With electronic betting, it has become even easier and more addictive among some millennials. Winning a few times in the beginning makes you believe you can make a fortune out of it. So you keep gambling till you’ve lost too much and you are tempted to gamble even more because you are desperate to retrieve your lost money. That is one way to go downhill very fast. The golden rule in gambling is not to bet more than you can afford to lose. Don’t throw in your savings with the hope that you might double it. You won’t!