Table of Contents
- Dipping into your Savings
- Not Having Emergency Funds
- Delaying on Investments Until you have ‘More Money’
- Living Beyond Your Earnings
- Relying on Loans
The habits formed when trying to build our finances are only expected to be positive habits, anything else is not an option. Sometimes, we randomly make up our minds to stop a bad habit but find ourselves going back to what exactly we thought we were running from. So, why does this happen and how can we put a permanent stop to this?
This article will answer these questions using five major money bad habits you should stop and also showing you how these habits hinder your ability to create wealth.
Dipping into your Savings
At BlackCOD Asset Management, our goal is to help you build wealth but this would be impossible if you continue to dip into your savings, you need a high level of discipline to build wealth, avoid obstructing the flow of your savings and dipping into it. You can simply operate a savings plan that will forbid you from dipping into it until a set time frame. Experts advice that for you to have a great investment, your savings must be a success first, because savings is one of the healthiest means to investments. So, set a savings goal, set a time frame to it and strictly adhere to it.
Not Having Emergency Funds
A perfect example of an emergency would be COVID-19, no one planned for this yet it came. People did not only suffer financial losses, some also lost their jobs. Imagine someone losing his/her job without an emergency plan, this is clearly as a result of money bad habit. Again, research according to cowrywise shows that your emergency funds should cover at least three to six months of your monthly expenses. For example; if it cost you N100,000 to cover your expenses for a month, you should have at least N300,000 to N600,000 in your emergency account. Failure to have an emergency fund will land you into debts whenever emergencies pop up.
Delaying on Investments Until you have ‘More Money’
One characteristic about money is that, it is NEVER enough. The earlier you understand this, the better. You do not need to become a financial expert to see that the economy of things is never stable, it is filled with gains and losses but if you never invest the money you have today you would never know if you can be richer or remain where you are.
Delaying on investments until you have more money is a money bad habit that you must stop, financial growth cannot be achieved with such a habit. In a global market where the economy of almost everything is always going up, if you fail to act now, its just a matter of time before you would realize that the world has left you behind in your quest for wealth and you never found enough money to invest. Do not let that be your story.
Living Beyond Your Earnings
If you are guilty of this money bad habit, it simply means you are living by paycheck to paycheck. No income is to small to save from, no matter how small. Cut down on your expenses even if this means that you might have to manage a certain lifestyle for a brief period of time. Remember, no pain no gain.
Relying on Loans
While we believe that not all loans are bad, depending on what you use it for the case can be different. For example; relying on loans to pay your bills continuously will only lead to a financial melt down at the end of the day. If you are taking a loan for a business or a one-off emergency, that is understandable, but other purposes might not.
Incessant borrowing is a money bad habit, if you battle with this habit then it is time to start living within your means, cut down on all your expenses, strategically device other means to raise money and if you must take a loan make sure it is a good loan to execute ideas that will further return some profits.
Do not take a loan to consume.