Inability to Distinguish Between Needs and Wants
Yes, you must live a decent life, but the ability to distinguish between needs and wants on a moment-to-moment basis will prevent you from carrying an empty wallet and falling into destitution and debt. Essentials are those items you cannot live without. For instance, due to the nature of my job, I cannot function without electricity and must spend money generating power when there is a blackout. That is a requirement.
Wants are things you would like to have but that do not have a significant impact on your existence. For instance, acquiring an additional pair of shoes because you have a weekend function is a want.
Surprisingly, many individuals focus on their wants and search for ways to satisfy the yearning for these wants, resulting in monthly overspending. The outcome is an empty pocket. Make a distinction between your needs and your desires, and strive not to fulfill your needs unless you have the means to do so.
2. Insufficient Investment
One of the reasons we invest is to avoid having empty pockets. Attempting to invest with a view toward a rapid return presents a challenge. Work toward investing a certain percentage of your monthly income in a long-term asset or long-term investment program that will benefit you in the long run. For instance, investing in real estate on a monthly basis is one of my favorite investment strategies.
3. Ignoring Savings
It is extremely difficult and requires a great deal of discipline to accumulate funds. It is however very simple to lose everything in a single moment of """"insanity""""
Start by building your resources. Reduce your expenses immediately in order to save at least 10% of your monthly revenue. Put it aside and forget about it. In 5 years (60 months), you will have $6000 if you save $100 per month. The good news about having a culture of careful savings is that after just six months, you will begin to feel more confident, have more serenity and less anxiety about the future, and you will know that you have something to fall back on.
Each time you save a little more, your account balance will grow a little bit, preparing you for greater opportunities. For instance, after five years, you could decide to purchase a home, become a proprietor, earn rent from your property while continuing to work, save money, and earn more money from property rentals.
If you consistently apply these three steps, you will discover that you will stop getting broke, live a happier, less stressful life, and eventually shift from a dry pocket to a fat bank account.
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