In the dog eat dog world of trying to get ahead, many people find their lifestyles not working for them. Money problems arise as they fall behind. There are ways you can get ahead of the system and invest in your future. The most common money mistakes are people living beyond their means, not developing a budget for themselves, and failing to put together an emergency fund.
All three of these working together can help keep you out of the poor house.Let’s tackle them one at a time to show how you can get ahead and keep your expensive habits at bay.
1. Living Beyond Your Means
The first money mistake is having a beer pocketbook and champagne tastes which can severely impact your ability to get ahead. It’s enjoyable purchasing all those things, but when the bills begin to flow at the end of the month, do you really need the items you purchased.
When you begin playing credit card roulette, you know you need to pare back. Seeing on both media and the people around can give us a feeling of not having enough NOW. NOW is the operative word. There are several ways to get around this and to start having prosperity in your life.
Start paying for your essentials with cash. Go the grocery store without your credit or debit cards. Make sure to prepare a list. Plan for your purchases instead of just pulling out the card and putting it on plastic.
2. Not Having A Budget
Budget! Mention that word and people begin to sweat and panic. Another word is planning. When you know where your money is going to you have a better chance of not overspending and being able to create the lifestyle you desire.
Start each month off which what you are planning on for income and what you are planning to spend. If you are having a hard time making ends meet, pull out envelopes and put what you need in cash for the bills that need to be paid.
It is never fun to just pay the bills so make sure you also designate a fun stash for yourself as well. But what do you do if you have an emergency come up? That’s when you create and emergency fund to handle just those situations.
3. Needing To Build An Emergency Fund
An emergency fund is a money you put in a separate account for emergencies or needs. This is not a fund that is used because you want to head out with your friends, but when the car blows a gasket so you can’t go out with your friends.
Putting aside a specific amount of money each pay period will help you to create a nest egg to help you when the bad times happen. Start with something simple, such as ten percent of your take home pay. This will allow you to be prepared when things pop up.
Once you see how easy putting an emergency fund together, you can also work on more on your Fun Fund, allowing you to save for vacations, the new car, the lifestyle you want.
Developing money management skills that keep you from overspending, not investing, and creating an expensive lifestyle you can’t keep up with, will help you to get ahead in the game. It won’t take long and you will ease the stress in your life caused by poor money management skills.