There are financial decisions that only rich people make. That is the difference between the rich and the poor people. Financial management and learning where to put your many makes all the difference. People who never achieve financial freedom have a habit of making poor financial decisions that end up costing them in the long run.
Some of these financial decisions might not look as bad as they sound, but they are detrimental to financial growth. Here are some financial mistakes that are keeping you poor and preventing your financial growth:
Today every American has a car payment. Making payments seems like the standard and the rule. The truth is that you do not have to make car payments. Instead of buying a car that you cannot afford, buy a used car that you can afford.
The best way to buy a car is actually to save for it. Put money aside, and before you know it, you will have enough money for the car. You can keep those car payments aside and use them for something more beneficial or add them to your investment portfolio.
Buying a House that you Cannot Afford
The biggest mistake you can make is buying a house that you cannot afford. When buying a home, get one that you can afford to pay for the mortgage without any stress. If you have to pay more than half of your salary, you are not yet to buy a house.
Take some time to save money and increase your portfolio. If you are single, you might not need a four-bedroom house, stay away from a big house, and get a small one that is easy to pay.
Taking Unnecessary Debt
You do not have to finance everything. Hire purchase and financing causes unnecessary debt. Do not go on vacation if you are not ready to pay for it because it will only cost you more. unnecessary credit card debt is something that you need to avoid. Some of the unnecessary debt comes with a very high interest rate, and it hurts your finances more.
Not Having an Emergency Fund
not having an emergency fund is very dangerous. In case you lose your job or you need money urgently, you will end up in debt. you need an emergency fund to shield you from unexpected financial commitments. your emergency fund will depend on your needs and also expenses.