Today I’m not going to tell you about the things you should do with your money.
Instead, I’m going to go over 5 mistakes you should definitely avoid . And I share them with you after burning my wings on some of them…
However, changing my mindset on these points has really allowed me to take my personal finances to the next level, and make my money grow .
So here’s what you should never do with your Dollars – apart from throwing your notes in the chimney.
1.Choose your “default” financial institutions
I bet you’re a bit like me: you haven’t spent hours researching the best place to open your first bank account yourself.
Then when the age comes to have your current account, you open it in the same bank for simplicity. I myself had a bank account in a traditional bank for a long time, which I opened by default in the same bank as my parents.
Of course, staying in the bank of his childhood is easy. But that’s often far from a good idea . And for several reasons.
Already, the fees charged by traditional banks are often far from advantageous. Many still have account maintenance or card fees that are billed to you every month. And the other fees are also generally far from the best (like the fees for paying by card abroad, for example).
Save on your bank account yes, but not only
The second problem in my view is what your banker will offer you in terms of products other than your bank account. Many of us still tend to go to our banker when looking to place our savings beyond a bank account.
The problem is that this is often a very bad idea .
The banker can only offer you “in-house” products, that is to say products created and/or offered by the bank itself. And these products are usually very far from advantageous.
Whether life insurance full of fees or PEA at exorbitant prices, banking products are still frankly on the pick-up today.
And we were talking about banks before, but the same goes for products that you open in the same establishment as your parents or relatives without comparing.
I myself had opened life insurance with the same broker as my parents… only to realize years later that it was actually a very bad contract. And that today there were dozens of excellent and much more advantageous life insurance policies.
2.Waiting too long before investing
You may be thinking that you are not earning enough yet. Or that it doesn’t seem like the right time after hearing pundits announcing the next crash on TV.
Still, starting early is probably the best thing you can do . And no need to invest hundreds of Dollars every month to start.
Starting early already allows you to take advantage of what is known as the magic of compound interest .
One of the great advantages of compound interest is that even very small amounts invested early can become very significant over the long term.
3.Lose it in consumer loans
Credit institutes are very good at making you believe that taking out consumer credit is a good idea. That you “deserve” that vacation by the water, or that brand new smartphone.
My point of view is different: no one “deserves” to go into debt .
Consumer loans are generally a very bad idea. And for many reasons, the most important of which are:
- They encourage you to live beyond your means . I’m not going to elaborate on this point too much because we talk about it in number 5 of the article, but the credits encourage you to spend on things that you cannot afford to buy.
- They cost you money . It feels like the credits are “free” – even that you got a good deal by subscribing to them. It’s just the opposite. Taking out credit has a price. And the higher the interest rate, the higher this price. So you’re paying more for something that you already couldn’t afford to buy in the first place. This money is also money that you will not have to spend on your next purchases. And that’s how we end up in the spiral of consumer credit.
4.Not knowing where your money is going
Closing your eyes to your expenses is the best way to throw money away every month.
You should always know how much money you’re spending, how much money you’re making, and what your financial goals are.
For that, keeping a budget is a great way to know what’s going on with your money and how much money you actually have.
Especially since keeping a budget today does not look like this at all:
There are plenty of great software and apps out there to keep your budget easy. Creating my first budget was a real game-changer in my financial situation, and I don’t know where I would be today if I had never decided to take this step.
So when you have some free time, pour yourself a glass of wine (or kombucha) and create your first budget. Your finances will thank you.
5.Never live beyond your means
One of the most important tenets of good financial health is to live below your means— not above it .
You have the ability to put some money aside, if only a little. You will not have to go into debt for your expenses, because you will gradually build up your savings.
Saving and investing should be among your top priorities . Not to have a nice figure in your bank account, but quite simply because it’s money you’ll need to carry out your future projects. Not putting aside today is putting yourself in a difficult situation tomorrow.
When you live below your means, you can easily manage any financial emergency, finance your dreams, save for your old age… You gain control over your life rather than letting your money dictate what you can. do or not.
And here, too, the main thing is to start. If it is better to save$200 per month than$50, it is also better to save$50 than$0. You can then increase this amount later when you can afford it.
