- Publish Date
- Monday, 22 May 2017, 3:33PM
10. Not having an emergency fund: An emergency fund is your first line of defence against unexpected financial problems. If you don’t have one, you will likely have to borrow money when an emergency pops up.
9. Neglecting to make a will: Without a will, guess who decides what happens with your finances and your kids? The state! Do you really want to let the government decide these issues for you? And be sure to update it as your life situation changes.
8. Not having enough insurance: Think of insurance as a very big emergency fund that supplements your cash emergency fund. It covers the things you couldn’t save up to cover in advance.
7. Marrying the wrong person: There are actually two major financial mistakes related to marriage: marrying a spendthrift and getting divorced. Couples where both spouses know and apply financial basics do much better than ones where one or both spouses have bad financial habits.
6. Not saving: The formula for financial prosperity is pretty simple:
• Spend less than you earn
• Do this for a long time
5. Buying too much house: Never purchase a home that requires a mortgage that is more than twice your household’s annual income.
4. Waiting to invest: Most of what we see in the press deals with getting the best return on your money. But actually, the factor that most influences the value of your investments is the time you have it invested.
3. Being deep in debt: The average person will now pay over $600,000 in interest over their lifetime.
The solution is simple:
• If you’re in debt, start taking steps to get out of debt.
• If you’re not in debt, don’t get into debt.
2. Not working to maximize your career: Your career is your most important financial asset.
This is because the average person can reasonably expect to earn in the neighborhood of $2 million during his lifetime. But if that person works hard and grows his income at 8% per year, he could have more than $3 million more than that. If he doesn’t, his $2 million can dry up to a bit over $1 million (or even less). So not working to make the most of your income can cost you millions of dollars. Develop and execute a plan to make the most of your career.
1. Over-spending: The first step to gaining wealth is spending less than you earn — it’s vital to making any financial progress. So when you over-spend, you’re doing the most damage possible to your finances.
From Yahoo Business