5 Financial Mistakes to Set You on the Path to Success

January 24, 2017

Feel like you’re stuck in a financial rut? Well, you’re not alone…

We all make mistakes, but if you really want to turn your financial situation around this year you’re going to have to make some changes. In order to achieve the financial success you’ve been dreaming of, you don’t need to hit a lucky streak like winning the lotto. There’s no denying that it would be nice, but not all of us are that fortunate.

Besides, wouldn’t you want to be in control of your finances? To help you get back on track, we’ve compiled a list of 5 common financial mistakes that hold people back from achieving financial freedom. Curb these bad habits and you’ll be surprised how fast you can turn your financial situation around!

1. Uncontrolled Spending

Have you ever checked your bank balance, discovered that it’s much lower than you anticipated, and wondered what you spent your money on? Chances are you’ve been spending carelessly, buying unnecessary items without really thinking about the amount you’re spending.

We all deserve a treat now and again, but treating yourself too often can put a serious dent in your pocketbook. It may not seem like much at the time, but every dollar adds up. Every time you’re too lazy to cook and opt to eat out, it starts to accumulate—before you know it, you will have spent well over $1,000. Just think what you could have done with that money instead: contributed to mortgage payments, car payments, savings… the list goes on.

Think twice before splurging, especially if you know your money could be put to better use elsewhere.

2. Not Having a Budget (Or not sticking to one)

A budget is essentially a plan, and if you have no plan you’re setting yourself up for financial failure. Setting (and sticking to) a budget may not be the most fun thing to do, but it will help you assess where you currently are and what you need to be doing to set yourself up for financial success.

As we discussed last week, it’s important to prioritize necessary items like food, housing, and utilities when preparing a budget. Entertainment and treats (Starbucks? Froyo?) should come last and be allocated minimal funds.

Take some time each month to assess and plan your finances, and watch as they gradually start to improve.

3. Lack of an Emergency Fund

You’re probably thinking that emergencies never happen to you. If you’ve been that lucky this far in life, good for you. Unfortunately, your luck is bound to run out at some point.

When bad things happen, they tend to hit us hard (think an unexpected job loss, hospitalization, family emergency, etc.). If you’re not prepared for a crisis, when one does arise, you’ll only find yourself drowning more and more in debt (if you’re not drowning already).

The best way to treat an emergency fund? Think of money that you put in your savings like a bill: Pay yourself a specific amount each month and forget about it. What you do now, your future self will thank (or hate) you for!

4. Increasing Your Debt

If you have stacks of credit cards that you’re using to pay off other debt, all you’re doing is borrowing from Peter to pay Paul. As a result, you’re sinking deeper into the quicksand that is debt. At best, you’re staying financially stagnant.

Instead of borrowing more, you should be doing everything you can to decrease your debt and move towards financial freedom!

5. Ignoring Alternative Sources of Income

Speaking of financial freedom, if you’re relying solely on the income from your 9-to-5 job, you’re making a huge mistake. Many people think that relying on their traditional job is the safest thing to do. News flash: it’s not.

If you rely solely on your corporate job, your life is basically in someone else’s hands!

Imagine if your boss decided to fire you today. Can you afford such a blow to your finances? Can your family? Even if it never happens, will you be able to live the life you’ve always dreamed of when you retire?

Instead of being a sitting duck at the mercy of the corporate C-suite, why not take control of your finances now, before it’s too late? If you’re not ready to leave your job, consider other opportunities, such as working from home on the side—this will allow you to more actively take control of your finances in your spare time.

The Key to Avoiding Financial Mistakes? Plan and Execute

No one is immune to making financial mistakes, but when you know better you can do better. Plan for both the expected and unexpected expenses of life. And once you have a solid plan in place, managing your expenses won’t seem like such a mammoth task.

Instead of your finances controlling you, take control of your finances. At Six Figure Profession, we want to help you experience true financial success. Visit our website at www.sixfigureprofession.com or call us at (858) 837-1505 to join a supportive team of financial mentors. Let’s get you on the path to financial freedom!

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