When it comes to monetary issues, we often make mistakes. Here is a compilation of mistakes and lessons you can draw from them.
Never borrow money that accrues interest to start a business
It is not advisable to borrow money and start a business unless you are borrowing to grow the business or paying for it through your salary.
The point is business takes a long time to mature and begin making a profit. It takes probably 5 to 7 years before you start swing results in your business.
The lender might not be patient enough to see the business undergo maturity process. You need to generate enough revenue, then profit before repaying back.
Never spend money you haven’t received.
Don’t fall a victim of spending the money you’re yet to receive. Sometimes, we promise people money that is yet to come and probably borrow to fulfill that pledge.
Save before you start spending
If you want to save, whenever you receive money, don’t start spending hoping that you’ll keep what remains. Normally what’s left is zero because as long as money to spend is available, the numerous things you can spend it on are also available.
When money to spend is not available, we naturally find a way of doing without it. That’s why I recommend having a sperate account for savings, or investment. Once you send the money there and no longer within your reach, you will find an alternative.
Before you spend any money, put your savings aside then spend what is left after saving.
Never ask for money when you meet someone that is successful
Due to greed and an insatiable love for money we make the mistake of asking for money when we meet financially successful people.
If you have the opportunity to meet a very wealthy person, never ask for money. Ask for ideas on how to make money. They may even choose to give you money on their own after seeing that your ideas are great, but let getting money from them should never be your objective.
Don’t keep your seed instead plant it
Many people stop at saving. It’s very, very difficult to save and have all you need to maintain your lifestyle, especially after retirement.
When you save, your savings are seed; plant it. When you just keep the seed, some seeds begin to die in the process, e.g., eaten by inflation and devaluation.
That’s why I recommend that you start honing your investment skills so you can avoid making this mistake.
Investing does not necessarily mean setting up a business; I am not necessarily talking about creating a business because you can easily lose money in business.
Never lend someone money you are not willing to lose
This is a huge issue, I have been a victim of lending cash to my friends, and they fail to pay, even if they pay, it must have resulted in problems. The truth is by the time you lend money to someone be assured should the person fail to pay; you will not die.
You should not even lose that person’s friendship if they fail to repay the money you lent them. If you feel the person might fail to pay you and this will not affect your relationship with them, then give them money.
If their failure to pay would make you hate this person’s entire clan, please advise the person to go to the bank.
Don’t be a guarantor if you are not willing to pay
Never append your signature to guarantee someone on a financial matter if you are not prepared or able to pay the money on their behalf. Do I have to explain that one? No, it’s self-explanatory.
Avoid keeping money you don’t intend to use in the short-term
For instance, don’t walk with N5,000 in your pocket when all you plan to do in a day costs N1,000. The truth is when you have the money, the things that carry it away becomes available.
Don’t spend money things that are not inevitable
Spending money on an item that you can do without (at least for the time being).
You need to start questioning what you intend to buy. You ask yourself what would happen if I didn’t buy this? If it is not necessary, just leave it and walk away.
Stop carrying other people’s financial burden
Wanting to be the savior of the world by helping everyone in financial need is not advisable. I am not saying being generous doesn’t worth it, but you would be committing financial suicide if you continue saying yes.
Spending more than you earn
Consistently spending all you earn or more than you earn. It’s like having a drum where you have an inlet that’s smaller than the outlet. It will never get full.
If you think there is no way to salvage the situation, double your income, so as not to spend more than you earn. The implications of spending more than your earn are adverse and severe in the long run.