What are some of the things we do that can make us go broke or go down the road of financial ruin?
If you have ever wondered why you are never getting ahead in life, always facing the same roadblocks over and over again, take a look at some of these eight traps and see if you’re snared by one or more of them.
1. Gambling
Any kind of gambling is a losing proposition. The odds of winning are less likely than being hit by lightning. You have a better chance of getting rich by investing and putting the work in it.
For your personal finances, gambling has a detrimental effect in that as you attempt to chase winnings, you lose and your loses ultimately become unmanageable. Gamblers tend to spend their wages, spare cash and even get into debt to cover theirs loses. This digs them deeper into financial problems that will only end in financial destruction.
2. Addiction
Addiction is the worst trap to be ensnared in. It costs a lot of money to maintain an addiction and more often than not, leads to poverty.
Addiction is something that is heavily associated with poverty and has ripple effects on future generations. This is because while you are an addict, your children may not receive an adequate education, and may even mimic your habits by developing addiction too. If you are facing addiction, please get some help before you completely ruin your life and the lives of your loved ones.
3. Shopping
As a compulsive habit, shopping will leave a lasting negative impression on your finances.
By making it a habit, you can seriously derail your goals. Try to develop good habits that will help you cope with the itch to spend without thinking.
4. No Financial IQ
The lack of financial literacy – the ability to understand money and finance – has much living from salary to salary, unable to save, buy homes or even pay for unexpected expenses such as medical bills or repairs.
Money affects your life every day, and thus it is a disservice to not give it the attention it deserves. Your financial literacy affects every single decision you make: how you earn, spend, save and even invest. Therefore, it helps A LOT to gain financial literacy and increase your chances to achieve your financial goals i.e. getting out of debt, buy a house.
5. Showing Off
If your main focus in life is looking good and being Instagram worthy, then my friend, you are investing in a depreciating asset.
It is one thing to stay in shape, be well-groomed and another to wear designer clothes, shoes and drive the latest model luxury cars. The thing about things – clothes, shoes and cars – is that they’re depreciating assets. So the moment you buy them to satisfy your need, they are worthless than what you paid for.
Overall the value of an investment in looking good and showing off looks worse and worse with time for you financially.
6. Debt
There is nothing that can make you poorer than paying interest on purchases that you made but can’t pay off.
Mobile loans and credit card debts will put you in a state of financial quagmire quicker than you can imagine. If you don’t want to be poor, don’t borrow to buy things before you can afford to pay for them with cash.
7. Not Investing
Not investing is a bad idea. Cash is always a bad idea, even in uncertain times – most of the time.
So if you have cash sitting in the bank, and are the conservative type that doesn’t ‘like’ investing. I recommend financing a broad range of long-term investment strategy to protect your money such as real estate, dividend stocks and more. There is a cost to not investing, which is inflation. Every day you wait to invest or fail to invest, you are losing out.
Put your foot down and stop losing. Start making money no matter how little it is. Your money won’t earn you anything unless you put it work for you.
8. No Goals
Having no goals, no plans only translates to bigger financial risks.
Without having your plans are written down and a road map to achieve them, you are generally planning to lose at life. Life has a way of throwing things at us like sudden layoffs, divorce, retrenchment, medical bills, and more, can really knock you off your boots and set you back decades. Everything you would like to do can be achieved with a little input at different stages in life. Being prepared before hand will always help ease the load.
Final Word
If you are ensnared in any of these, don’t worry. There is still time to fix your money situation but first, you need to take your finances seriously and put in the work.
Start by not spending unnecessarily and start saving.
Seriously.
Go Forth and Conquer!
If you have any questions on your own personal financial situation or need help getting started, feel free to send me an email at [email protected].
Top photo by Robert Bogdan from Pexels.