How to avoid classic financial pitfalls


“Money doesn’t grow on trees”- a common phrase heard by most children growing up. The impact of which only becomes a reality early on into adulthood. When it is our own hard-earned money that is all of a sudden at stake, we tend to try and think twice about how exactly we plan on spending it. Sometimes, however, we still fall into the trap of misspending. Some of us are natural-born treasurers who know exactly where to allocate financial resources and are capable of ensuring the appropriate allocation of funds while the rest of us can only be considered as spendthrifts, people who spend money in a careless or wasteful way. For the latter, this is by no means an indication of the level of responsibility that can be bestowed upon us as individuals of a well-functioning society. All it means is that a little guidance is necessary to get us on the right path. So below is a list of ways to avoid falling into classic financial pitfalls.

Photo: Unsplash.com

Budget! Budget! Budget and we cannot stress this enough, budget!

The easiest way to fall into a financial pitfall is to not budget. It is a guarantee that spending your money without a plan will result in some serious budget deficits.

Avoid impulse buying

When we see something we want, it’s hard to say no. It is human nature to want to indulge ourselves. We all go shopping with the best intentions but when we see the big red and white for sale sign in the window, we just can’t help ourselves.

Live within your means

It is human nature to always want more than what we have. Having to admit that we are comfortable living in our current social standing whatever it may be, isn’t always something we are capable of doing, so get comfortable. We can’t all afford that brand new Ferrari.

Credit cards

Credit cards are one of the biggest shams in existence. Giving anybody the ability to spend money they don’t actually have is a steadfast way to send them spiraling into debt. Once you are in that deeply dug hole, it is extremely difficult to crawl your way out of it. So just don’t go there.

Photo: Unsplash.com

Don’t touch your savings

It’s hard. We get it. The temptation of having the money to spend but not being able to spend it would bring most wilful people to their knees. In situations like these, it is important to remember why you started your savings or investment accounts. Whether it be a college fund for youngsters, retirement funds for the elderly, or just a savings accounts for a rainy day. Spending the money and then being put in the position where you actually really need it is a slippery slope to regret.

Don’t let your bills add up

Sometimes it may be tempting to push the limits on debts, especially if the payments are not due immediately. So make an effort to open your bills and pay them when you get them to avoid this.

To close this off with a commonly heard phrase, if you cannot afford two of them then you cannot afford to buy one of them. This is a golden rule to live by and will live to serve you for the rest of your financially stable life.