In most cases people spend their 20’s finishing up with university studies, sporting, having fun with friends, some even marrying in their late 20’s and getting their first jobs. The thirty age bracket can really be disastrous if someone doesn’t adjust well. This is when most people firmly establish themselves in their careers, family responsibilities popup since children are growing up, and some even setting up their own ventures. It is a period if not carefully managed can land one into financial strains that can have a major setback in your family's future. Most people majorly focus on the here-and-now set of living which at a times results to the worse. You put aside their future goals and focus on daily and monthly expenditures only. I will mention to you some of these money mistakes we do commit regulary, that derails us financially.
1.Lack of a financial plan with your partner.
This is greatest undoing in most relationships in the recent days. It’s now a try and error kind of gamble where you live together before getting married. Someveven set up startups together. As time goes by one wastes their resources with the wrong person when in the end they part ways. This also happens in some marriages where partners do not have an open discussion about the salaries they earn, other sources of income, their spending habits, and the family’s budget. This is very important since it helps in understanding each other’s pocket power to avoid financial constraints.
2.You overspend on children expenses.
At this point in life is when you get the first born and you are very excited with the change of state to become a parent, and we do everything for the child’s happiness. We do buy them toys, accessories, brand clothes, and furnished baby furniture. This is where we get it wrong, am not against it but you need not to overdo it, let it have a limit. What if the money went to savings for the baby emergency fund account, or their education? They will definitely overgrow the need for toys, and destroy them as they play, so do not let the excitement influence your spending habit.
3.Living beyond your means.
We definitely have different sources of income, pursue different careers with different pay slips. We do meet our friend driving fancy cars, living in high end suburbs, and their children attending the British system type of schools. We tend to do a replica of that with our lives. Some even want to live the same standards as our parents forgetting that they spent decades accumulating that wealth. This becomes the ulcer that eats up our happiness, and goes a long way to hurt us in future since when you go broke the children cannot understand because they are used to that high kind of lifestyle.
4.Expensive house rent.
Some find it classy to live in lavish apartments, in high end estates that rent is almost half your salary just to be perceived to be in a certain class people. If you’re living in a house that you are paying rent that is more than 30% of your salary then you better vacate it. This means that you will work to strive to maintain that social class which turns out to be expensive, and not worth it. This denies you the opportunity to invest for your future.
5.Ignoring the life insurance while it’s cheap.
According to the life insurance policy the younger and more healthier you are the cheaper the monthly premiums you pay. This will accumulate to a lot by the time we are old, weary are sickly it will serve you well and you won't regret it. The advantage is that it cover some of your loved ones as the beneficiaries even when you do not make it. Having it gives you peace of mind knowing that if at all the worst happens you and your loved ones are covered.
6.Lack of an emergency fund plan.
We cannot stop natural calamities like fire, floods, and sickness.
At times we may become sick and unable to work, and even accumulate large medical bills when the worst happens. The NHIF scheme, is not enough. In some situations specialized treatment maybe of necessity to some. In such it may not be of help hence one has to dig deeper in their savings accounts or even sell out investment shares.
7.Dependency on credit card debts.
It’s been the quickest solution nowadays due to the cashless transfers, gives an extra help as one awaits paychecks. It also comes with goodies of earning points and getting to various draws to win lots of prices. Coming to thinking of it, it makes one glued its fantasies and you get addicted to impulse buying, not forgetting their service charges, and interest rates. This really derails your finances and making progress really becomes a challenge.
8.Lack of plan for retirement.
This is the last thing that ever crosses one’s mind while working especially if employed. Getting a house, a car and children attending school should be an indication you’re getting old. You have to either start up a venture, invest in shares and stocks, or even save. We should not just consider the RBA government scheme, we should let that be our fall back plan if the set out plan fails in one way or the other. In some cases some retire when they still have children in school, let us not ignore that possibility, so lack of a solid plan may make your years of sheer hard work be a waste making you even broke like you were in your 20’s when you were still hustling.
Wawerukamotho97@yahoo.com
Content sourced from the young entrepreneur magazine and
Business insider uk
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