Managing finances sensibly is the secret behind success. This is something that all financially successful people practice. They have made a deliberate decision to manage their money, taking calculated moves, risks and avoiding the pitfalls that can swallow their hard-earned cash. Here are five money mistakes that financially successful people avoid by all means:
They spend less than what they earn
This is synonymous to living within your means. An outsider may call them stingy but they know what they are after. Their income may be good but they will not spend everything they have just to please others. They will live within their means, and set aside part of their earnings for investment.
It is suggested that, at minimum, you should save at least twenty percent of your earnings while the rest is spent on only necessities. Avoid spending on luxurious goods and services. This may lead you down the path of debt and financial misery.
Their focus is on value rather than the price of a product
They go for high quality products and those that will last a long time. They would rather buy a high quality expensive pair of shoes than spend their money on buying a trendy pair that will only last a few months.
There is some logic in this principle. Buying something which is of low or average quality will see you back at the shop sooner or later. You’ll end up paying more than you would have, had you bought better quality, higher priced items.
They keep an eye on their accounts
To them, there is nothing that is too small to escape their attention if it’s in their account. They keep track of their bank charges to ensure that nothing is out of ordinary. If they notice something which does not make sense or add up, they’ll take the necessary action to remedy it.
Increased earnings do not warrant a big change in their life
Their financial habits are rarely changed by a pay raise or increased earnings. They take calculated moves and instead of spending the increase on luxuries, they invest it to make more money.
Stagnant income is a turn off for them
They are ready to take action if their income remains too constant for some time. They are excited by growing earnings and that is why they often start their own business rather than staying in one job for long.