Financial Mistakes the Wealthy Avoid

Unless you are already rich, you don’t understand what it’s like to be rich. That said, you don’t know the mental challenges that have been overcome and the sacrifices that have been made to get to that level of wealth. In the pursuit of becoming wealthy, you need changes in habits, mindset and corresponding attitude in order to avoid these 10 common mistakes.

Avoiding the Topic of Finances

Numbers can be overwhelming, especially when those numbers start getting bigger and bigger. However, you absolutely cannot turn a blind eye to your deposit accounts or investment statements if you expect to be wealthy in the long term.

Focusing Only on Saving and Not on Earning

So you’ve decided you want to be rich. Your strategy? Spend less. That’s a good start, but it is in no way going to make you a “one percenter” on its own. There is a limit on how much you can save, but there isn’t one on how much you can earn. Rather than spend your time worrying about where you can cut financial corners, invest that time in finding alternative ways to boost your income. From a raise at work to a side job, the possibilities are endless.

In the pursuit of becoming wealthy, you need changes in habits, mindset and corresponding attitude in order to avoid these 10 common mistakes.Forgo Saving

While you should primarily focus on earning more, that doesn’t mean you should forget about saving altogether. Everyone should put back at least 10 percent of their income into a savings account as a nest egg, in case of emergencies, for example.

“[Wealthy people] don’t live completely in the now; instead, they consider what they’re going to need tomorrow and they make that a priority too,” says Rhett Power, contributor.

Live Beyond Their Means

An occasional splurge on a nice vacation for the family is one thing, but wealthy people typically don’t spend their money just because they have it. Not if they want to remain wealthy, that is.

Forget to Adjust Their Budget After a Big Life Event

Whether you give birth to a child or a parent passes away, any big life change will affect your bottom line.

“Whenever your life takes a turn in a new direction, find time to sit down, look at your finances and adjust them accordingly,” says LearnVest’s Molly Triffin in Forbes. It might not be the first thing on your mind, but it still needs to be in the mix.

Worry More About Price than Value

Being frugal is a noble intention, but it doesn’t always work out the best for you in the long run.

“Price-shoppers and coupon-clippers will hate this, but when you buy shoddy goods, you get shoddy results. If you live by the price, you die by the price,” says contributor Daniel Ally. “Instead of buying what is ‘cheap,’ buy the best goods that are available.”

Overuse Credit

In the pursuit of “saving” you may be tempted to utilize credit to get what you need now. Don’t give in to that urge. When interest is taken into account, you will be paying much more later on, largely decreasing the charged items’ long-term value.

Waste Money on Fees

Use of credit could also burn you with additional fees such as overdraft charges or missed payment penalties. Don’t succumb to the “I want it now” mentality if you are not set up for it. In the meantime, automate your payments and utilize online banking to constantly monitor your accounts and ensure everything is on par and being paid on time.

Keep Secrets from Family

Not only is avoiding the topic of finances a no-no for you, avoiding it with your partner is also harmful. Yes, these talks can be uncomfortable and may lead to arguments, but without a common understanding of finances and monetary goals, there is no way you will reach those goals.

Forget to Invest in Themselves

Benjamin Franklin, who is said to have been America’s very first millionaire, has been quoted as saying, “An investment in yourself pays the best interest.” Not only was Ben wealthy, he was wise; he understood the importance of continually bettering yourself through increased education and training investments.

It’s also important to note that experiences can make you “rich” as well in terms of self-fulfillment, so don’t forget to also make yourself happy.

It is not possible to make these mental shifts overnight, as altering your mindset is quite the undertaking. However, once you start changing your habits and avoiding these mistakes, you will learn how to make the most of your money, in more ways than one.


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