Declining Personal Finances? 10 Ways You’re Ruining Your Financial Future

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Are you struggling to maintain financial stability? Most people, at some point in their lives, face financial troubles. While sometimes the situation might be out of your control, usually it can be linked to poor financial choices. 

Having constant money problems looming over your head is a stressful way to live. Are you looking for ways to build a secure financial future?

You’ve come to the right place. In this post, we’re sharing the common reasons why you’re failing to keep your personal finances in check and the best ways to improve them. Take a look.

1. Excessive Day-To-Day Spending

Do you live every day like it’s your last by spending frivolously? While this might be a liberating mindset, it’s not doing much for your finances. You need to curb your urge to spend on non-essential items.

Before going out shopping, make a list of things you actually need and stick to it. Unsubscribe from promotional emails and uninstall shopping apps. Also, it would be best to quit drinking and smoking. These are expensive (and injurious) habits.

2. Purchasing Major Assets

Purchasing a house or a car is a major financial decision. Ideally, you should take this decision after careful consideration. Can you do away with the amount of money it would require to buy a car or a house?

If the answer is no, you shouldn’t rush into taking a loan just to fulfil your dreams. Just continue working hard and eventually, the right time will come.

3. Missing Payment Due Dates

In the short-term, missing bill payments might just mean a nominal fine. However, in the long-term, it adversely impacts your credit score. And your credit score affects your ability to borrow in the future and has other implications. 

If you are short on cash, take out a small loan from Mulah to pay your bills on time.

4. Living Paycheque to Paycheque

Living paycheque to paycheque isn’t the worst thing, but it isn’t ideal either. While you might be staying out of debt, it takes just one unfortunate event to push you to make that choice. 

Our advice would be to try lowering your expenses or introduce an additional source of income. And utilise the surplus income to create an emergency fund.

5. Not Having a Budget

No one is born with money management skills, everyone has to learn it. Creating a budget is the easiest solution to keep track of your spendings. You can start bullet journaling or download a budget app to note your expenses.

6. Too Much Lending

Being generous with your money is an admirable trait to have. But is lending the best idea when your finances are hanging on by a thread?

Try to refrain from lending money when you’re in a rough financial spot. Also, it’s a good idea to discuss the terms of repayment beforehand to prevent any bad blood.

7. No Financial Goals

It is possible that you don’t have the innate motivation to save money. If that’s the case, set up some short-term and long-term financial goals for yourself. Use these to encourage savings. 

8. Not Sharing the Financial Burden

Whether you live with your partner or family, it’s important to share the financial burden. Even if you’re the sole earner, you need to keep everyone in the loop regarding the overall financial situation. This will discourage other family members from spending on unnecessary things. 

9. Poorly Utilising Home Equity

You should reserve a home equity line of credit for serious emergencies. Avoid jeopardising your homeownership for an avoidable expense. 

10. Not Investing

When your savings have the potential to make more money, why not take it? Investing is an important part of building a secure financial future. Discover and learn different ways to invest and increase your wealth.

The Bottom Line

Even if you win the lottery, without financial literacy, you won’t be able to retain this wealth. Earning money is crucial for a comfortable life, but so is managing it wisely.

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