How everyone makes, saves and spends their money is largely governed by their money habits.
A lot of people however, struggle with their personal finance due to the choice they make and their beliefs about money.
Here are five common wrong beliefs about personal finance.
1. Shop now, save later
What comes first to you mind when you get your paycheck? Shopping, right? Shopping can really be a fun when you have money to spend. However, you’ll be making a terrible financial mistake if you always spend your money shopping and forgetting the bills and other financial obligations.
When you get your pay check, first think to consider is to pay the bills, then savings. These two are very important to your personal finance. You can decide to do whatever you like with the rest.
2. Budget is not so necessary
You actually believe you don’t need to have a budge because you can control your spending. Yes, budget is meant to guide your spending and all, but the big idea behind having a budget is to spend your money for the right reasons.
Without a budget, you might simply go on and buy everything you want. Without a budget you’ll possibly not bother to save as you have no mechanism to track or guide your spending let alone saving.
3. Everything will work itself out
This is probably the wrongest belief about money. If you have the belief that everything will work itself out, you’ll wake up one day to realize that you’ve never taken a step to meet your goals.
4. With a good salary, I am financially secure
A good salary means you’re getting a really good pay from your employer and getting a huge paycheck does not automatically translate to financial security. If you don’t work with a budget or a financial plan, you might begin to overspend and then run into debts.
5. More money, fewer worries
Having more money doesn’t eliminate worries. No rich man or woman has ever come out to say he/she has gotten enough money they need in life. It’s in the nature of man not to be content with whatever he has. You’ll also make money to meet financial goals, pay bills and do whatever you want. And the more you make money, the more worries you have.