According experts, some people who are currently at the lower class pedestrian, referred to as the poor, have at one time or the other made financial errors that ended up bringing them down to the class they are now.
In order not to become victims of unhealthy financial living, experts advise you should avoid the following financial errors:
1. Living above your means can ruin your financial life: Research has shown that many people live above their income such that someone who earns a monthly income of N100,000, also has a monthly expenditure of not less than N130,000. This means that such person do not only live above his or her means, but also incur debt that he or she will leave to service without being able to have savings.
Bismark Rewane, a renowned financial analyst, affirmed in a recent report that the problem with the financial live of many Nigerians is that people tends to live above their sources of livelihood.
According to him, for an individual to spend more than he or she earn, is the most common money mistake that Nigerians make.
Thus, to have healthy financial life avoid spending above your earnings, rather save a good portion of your earning so as to invest with it.
2. Avoid a life without financial plan: One of the biggest financial errors one can make in life is to live without having any financial plan, and many people have been found to be guilty of such unhealthy living style. This is because many people regard financial planning as a secondary thing to be done at one’s old age.
In situations like this, people without financial plans dread retirement because they end up having nothing to retire to. Therefore, for you to have a good financial live, learn to plan financially by adequately saving and investing for your future, that of your family in order to enable you retire rich.
Therefore, experts are of the view that one needs to set up lifetime financial goals that can enable him or her to determine the appropriate investment that is not only rewarding but will satisfy the person’s lifetime goals, and allocate resources to it. Also, know where you are, where you want to be and put in place a realistic plan to get there.
3. Start early to plan for your future:Generally, some people especially youths do not deem it fit to start early to plan for their future. This is because they think financial planning and investment is for the aged.
Therefore, one needs to start early enough to earmark a portion of ones earnings into interest yielding investment, policies or commodities, which the person can fall back on in the case of either retirement, loss of job or unforeseen circumstances.
Always remember that no time in one’s life is too early for an individual start investing, findings have shown that the best time remains the early stage of life.
4. Invest slowly & steadily: Financial experts have also noted that the problem with many people financially, is that they live month to month without developing healthy saving culture until late in their lives.
This is why financial analyst advised that “contributions to a savings plan should be recognised as the first necessary monthly expenses, so that money saved will not be seen as the money that can be spent. Currently, you can start saving in small amounts, which you can always increase in the future.”