Have you ever said I never know where my money goes? Yet, you probably make quite an amount of money, maybe even a lot of it, but you just don’t know where it all goes. You are not alone. A lot of people feel like their money just slips through their fingers. If you cannot count even one important thing you did with your money, it’s probably because you made one or more of the following mistakes. If this is you, don’t despair, there’s hope, view details here.
You spend as much as you make
This is a big mistake that many people make. You have been considering your entire income as disposable income when in real sense, it’s not. What you need to do instead is to pay yourself first when you receive your income. This doesn’t mean splurging on a new bag, it means putting aside a little amount say 20% for savings and 15% investment, using only 50% as expenses and considering the remaining amount as disposable income. To enable you to achieve this, you need to you need to create a budget based on your monthly income and then analyse your recurring expenses and find a way to reduce them. And when you feel that your disposable income is not enough, you increase your income streams not the percentage of allocation.
Not paying off your debts as soon as you can
You may have become so accustomed to owing a debt that you have begun to accept that as your reality. You are so deep in denial that you keep telling yourself that your debt isn’t as bad your friends. But that does not change how you feel, unhappy and tied down by your debts. You cannot live the life you want because of it. You want to travel but you cannot do that because paying them off should be your priority. Need I mention failure to pay means that you may lose your house or your car?
If that is you, it’s high time you take over the reins of your life. Start envisioning a future without debt by stopping the accumulation of more debts and creating making a plan on how you can clear off your debts. You can do this by increasing the amount of money you pay towards them. Remember the sooner you become debt-free the sooner you will be able to live the life you want.
Renting a place that is 30% more than your income
Sometimes the place we want to live in or are living in is way above our paycheck but we don’t care. We love it and living there is what will make us happy. But most times we are only kidding ourselves since living there will mean denying ourselves amenities like internet or getting into deeper debt. Needless to say, it just is not feasible to be renting a place that is more than 30 percent of your income. Not only because you have other expenses but you will also need to save and have some disposable money. If all your money is going towards rent, you will not only be strained financially, you will also be psychologically strained.
If you are paying more than what is sensible for your income, it is time to move out and into a cheaper place. It may seem daunting but trust me, you will be happier in the long run. If you are considering a place that’s too expensive for you, heed this advice, don’t rent it. You will be happier if you don’t and if you follow the advice here, you may soon be able to comfortably rent one.