Personal Finances: The Three Don’ts

Personal finances and how to manage them has haunted many on a budget. He’s one point of view on the subject click here and here’s another:

Do You Make These 3 Mistakes With Your Personal Finances?

Until you get rid of the negative habits that are adversely affecting your personal finances, it will always be difficult for you to stop being a slave to money.

For instance, let’s say you find yourself in a situation where you are always short of money and you get an unexpected cash windfall.

It won’t be long before you are right back where you started, for as long as you do not deal with the habits that caused you to be short of money in the first place.

It is all too easy to regret the outcome of bad financial choices you made in the past that are affecting your personal finances today.

However, having a good understanding of the key principles that relate to money and finance can change all that.

To this end, here are three mistakes you should avoid when it comes to developing positive habits that can help improve your personal finances.

Mistake # 1 – Having little or no control over your money

Look this is not as simple as knowing the best foods to have at Christmas time!

How often do you stop and think about the way you handle your money and your expenses?

If your answer is rarely, you will soon find yourself in a situation where you don’t know where your money goes, or if you do, you don’t have a say over where it goes.

Having to work extra years to recoup losses from poor financial decisions is not something to look forward to, especially when you find yourself with the need to hold on to a job you don’t like for longer than you expected.

A good starting point is to change the way you think about money.

For instance, your expenses are somebody else’s income.

Look at all your expenses and think about how you can turn them into your income.

The moment you start taking control over your personal finances and recognize the importance of the need to manage your money, your focus will shift from financial survival to prosperity.

Mistake # 2 – Failing to establish your financial position

To get from point A to point B, you need to know exactly where point A is.

When it comes to personal finances, few people take the time to ascertain their true financial position, or worse still, define it by their income.

As a result, they easily fall into the trap of spending money with the aim of impressing others, at the expense of their own happiness.

This invariably gets them into serious financial trouble.

Knowing your financial position (good or bad) will awaken you to a new reality, giving you the opportunity to start managing your finances responsibly.

Mistake # 3 – Spending more time worrying about money (or a lack of it), instead of doing something about it

Spending endless hours worrying about the implications of not having enough money is counterproductive as it shifts your focus, thereby denying you the opportunity to make better financial decisions.

If you are not happy with your financial results thus far, your breakthroughs will only come after you start taking deliberate steps to improve your financial situation.

You cannot drift through life and suddenly find yourself financially successful.

Author:  Augustine Mwanje – Consultant and Entrepreneur

Great article, another source worth considering here when it comes to finances. Enjoy.