Too often our spending choices are fraught with dangers of loss and yet we still choose poorly. This leads to gradual loss of income or, if unlucky, huge losses in a moment. Those who got cash but are not skilled in its handling, many uses for it appear most profitable, most of which later on bring about exiguous profits or colossal losses.
We already learned the reality and solutions to the pursuit of money. Apropos of that, eliminating ways in which you lose money is good an aide to said pursuit and ultimately a life of affluence.
Since long ago, people have been losing hard-earned money involuntarily through fraud, theft, or other acts of malice, be that as it may, people also lose lots of money voluntarily, but unlike charity donations, these they do unknowingly.
Here are some of the ways you lose money:
1. Failure to budget your money
If you cannot account for all of your expenditure, then you’re bound to make some significant losses without ever noticing. The reason most guys live paycheck-to-paycheck is because they do not budget. Lack of budgeting makes you spend more than necessary, which in turn leads to debt, and eventually depression.
Solution : Budgeting is planning how to spend what you have currently, as cash at hand or at the bank, but not what you’ll make in the near future. When budgeting, clearly distinguish essentials amongst your spending and savings. Knowing that you need to budget ain’t sufficient. It is wise to write down that budget and update it monthly. Budgeting helps you realize your financial goals and reduces overspending.
2. Advice from the wrong people
When you take financial advice, especially investment advice, from wrong people, then money will deprive you of its powers. Often, and this mostly occurs among the poor and middle class, you will hear someone (even a friend or your kin) tell you what you should invest in and what not to invest in, whereas they themselves have invested not or they don’t have experience whatsoever in that field.
Most times, you will find that the advice being given is something they have heard or watched from people or from the current Internet “gurus” all over. Surely, why should a car salesman advise you about investing in the stock market?
Solution : Seek advice from experts in the particular field. Even if you have to pay consultation fees, do so and prevent potential losses.
3. Forcing Impossible Earnings
This issue mostly affects new owners of substantial monies who want to quickly multiply the cash. Impossible earnings or quick riches come with extreme risk hence huge losses. Nowadays, there are lots of schemes promising quick riches for which a keen eye would simply spot it as “legal fraud” or a trickster scheme.
These schemes are carefully orchestrated and are meant to awaken the greed in you; they include online games like the lottery and family, including Ponzi schemes, online casinos etc.
These games are a form of gambling which should be only good to play if, and only if, you are financially free, not financially dependent. Just because someone won a multi-bet or a jackpot, doesn’t mean you’ll win too. Furthermore, some bookmakers pay regular people huge sums to claim they’ve won the jackpot only to find the “winner” back at his old job, six months later.
Solution : Tame your greed and more importantly run away (like a Kenyan athlete) from the alluring advice of these tricksters and schemers.
4. Food, Eating out, Candy
Spending on food, it being a necessity, is often overbudgeted. Most often you will find the food you need to lead a healthy life is often affordable. Also, purchasing candy, snacks and the like is not only unhealthy but money spent on such can often be saved.
It’s best to buy such, if necessary, in wholesale than buying few pieces every now and then. When you total the monthly cost of the few pieces you purchase every now and then, you end up with some substantial amount.
Eating out is always expensive since that is a business. The meal you purchase is meant to pay for the ingredients, the chefs, the rent, electricity etc. That said, I’m not saying you shouldn’t budget to go out once in a while, do so if it’s in your food budget.
Solution : Create a food budget.
5. Unnecessary expenses
These include excessive monies spent on leisure, and entertainment. Just because your friend has suddenly showed up and asked you to go out with them, and you’ll have to spend money you haven’t budgeted for, doesn’t mean you have to, you can always say NO. You shouldn’t be forced to go to one party/road trip after another.
Albeit it’s good to have fun every now and then, you do not need too much entertainment to survive. Spending money on liquor, cannabis, and other drugs is unnecessary, since you can live without them; unless you are an addict.
Solution : Let your friends know that they should tell you in advance to plan for events. Also, if you can’t afford it, don’t do it. Avoid the shackles of unnecessary expenses as they’re also addictive, and before you know it you’re a captive of ignorance.
How many times have you been in a supermarket and saw the Buy 2 Get 1 Free ad or something similar? Then have you ever thought what’s the intent behind that? A supermarket is also a business after profits. Which business gives out products for free without a catch?
Owners of these shops have already paid researchers to learn how to get you to keep buying more than what you planned for. We already know that eye-level items on the shelves are a little costly since people fail to check the top rows or bottom rows for the cheaper alternatives.
Everyone, at some point, has bought stuff they hadn’t planned for just because it also seemed necessary. Just remember they know how to get you in a relaxed suggestive mental state or in a decision-fatigue state so that you keep purchasing. Experienced shoppers also fall prey to this, so what can you do?
Solution: Always create a shopping list and carry it along with you. Well, what of those, despite carrying a shopping list, still don’t adhere to it to the latter? Then, don’t carry a credit card or any form of mobile money. Just carry a fixed cash amount, of course, with some extra for price changes. Doing this makes you buy only what you listed.
Poor spending habits lead to bankruptcy or brokenness. And remember it’s not about how much you make but how much you KEEP!