4 Mistake You Should Avoid Making With Your Money

“If hard work and dedication were all it took to become wealthy, our grandparents would have been millionaires!”- A Wise Man

You work hard each day focusing your energies on ensuring that you do the best possible job for your employer but what about the job you are doing for yourself financially?
You have heard it over and over again that if you just “get a job and work hard you will become successful.” Well “if hard work and dedication were all it took to become wealthy, our grandparents would have been millionaires!”

The fact is working hard is WORTHLESS - unless you know how to manage your hard earned money!

The truth is no matter how much time, effort and dedication you invest in your job or business, you will never achieve the success you deserve – unless you know how to take control of your money!
Look around you and you will see persons who have worked hard all their life and today have absolutely nothing to show for all their efforts -despite earning a fortune during their working years.
The question to ask is, “Do I want to be in the same state as they are in when my working years are over?” Unfortunately, your fate will be no different if you continue to make the same mistakes.

The first mistake that you must avoid is living your life with out a financial plan. It is critical that you have and set financial goals. As your financial goals will allow you to focus your efforts on why you are really working so hard and that is to provide the best possible life for you and your family. Without these goals you will squander your money, as you will have no definite sense of purpose.

So begin setting your financial goals today and see how your attitude and life will change. Remember “if you don’t know where you are going any road will lead you there!” Decide where you going today.

The second mistake you must avoid is trying to manage your money without a spending plan! One of the key reason people stay poor is that no matter how much money they earn they spend every penny!

Think about it. Every time you get money there is always something to spend it on and no matter how much money you have, you always seem to need more! The reason is that “your expenses always rise to the level of your income.” How many pay rises have you gotten since you have started working?

Yes and without fail your living expenses always rise to the level of your new salary. That is why it is so important that you have a spending plan, as it will allow you to find ways to eliminate unnecessary spending and focus your income on building your wealth.

It’s as simple as that.

Decide today that you will develop a workable spending plan that allows you to control your expense and keep at least 20 % of your income for you. “Taking Control of Your Money” workbook is a good resource to help you with this.

The third mistake you must avoid is not preparing for life. Life is filled with events and you should prepare yourself for these. There will be sickness, accidents, job loss and death - be prepared. Two ways to do this are:

1.Have a peace of mind fund to help you pay for these expenses without disrupting your finances. This should be at least 5% of your income and should be attached to an automatic teller card.
2.Review and ensure that you have adequate insurance protection.

Finally, the fourth mistake you want to avoid is living like there is no tomorrow. This means that you should start putting your money to work by investing appropriately. The two most important investments you can make are:

1.Homeownership. Life is just not comfortable without your own home. Therefore you should make it a priority to own your home.
2.Financial Portfolio. You need to grow your money and this is only possible by investing in sound financial instruments like stocks, government bond, mutual funds and individual retirement accounts.

Always remember that you are looking to grow your money. That means you should do everything possible to avoid investments that will lose you money. So before investing always ask, “What are the ways that I can lose money with this investment?”

Make no mistake; the most successful people are not those who work the hardest! The most successful people are those who have learnt how to manage their Time & Money. This is the key skill you need for success!

“If we are facing in the right direction, all we have to do is keep on walking.” - Buddhist Proverb

Copyright © 2009 – Glenn S. Ferguson