There is a popular myth that ostriches bury their head in the sand to avoid predators-that they are so stupid they believe if they can’t see the predator, the predator can’t see them. This actually is completely false. But popular myths are rarely based on fact, and “bury your head in the sand” is a common term meaning if you ignore your problems, they will go away.
But over in the real world that doesn’t happen. Just like a illustration given by Robert kiyosaki in one of is book. That like a high school student, struggling with algebra. If he ignore the course, he may fail and not get promoted to another class, if he miss the class he may not graduate from high school. And that may denial him access to college and her chance of survival in life may be slim. Unless he’s more smart.
Taking your eye off a financial issue hoping that ignoring it will just cure you money problem is completely “false” instead it deepen the problem. And this is exactly what millions of people are doing.
1. Not having emergency fund hoping that emergency won’t happen.
People who do not have an emergency fund are at the greatest risk of harming their financial future. When you do not have the extra cash sitting there, and an emergency happens, you will be forced to turn to debt every time. Mounting bad debts put pressure on you financially and draw you from achieving your goals. Financial pressure causes people to make more bad decisions and continues this toxic cycle of having no savings and turning to debt every time a problem arises.
What’s your insurance deductible if you were to get into a car crash (please, am buying hoping for any to get such) that was your fault? How about our home owners policy deductible if something were to happen to/at your home? I had to have my appendix out when I was younger. That’s an emergency surgery every single time no price shopping or planning ahead or that one. A total of $14,000 is what it cost almost two decades ago.
2. Not talking about money with your significant other.
Money is a cause of conflict in many marriages. And neglecting it can have a severe impact on your relationship. About a third of adults with partners report that money is a big source of conflict in their relationship. It’s no wonder that financial problems are a leading cause of divorce. Money is not a issue that should be neglected at all thinking that it will be solve itself. It won’t. If you’re committed to a relationship, you and your partner owed each other a calm, honest conversation about each others finance, habit’s, goals, and anxieties.
If you spouse is holding onto that belief that everything will work out naturally, you may have a difficult time getting them to participate in the discussion. Many personality types are much better at being flexible in the current moment but not great at planning for the long term.
This personalities often feel that if they keep working hard everything will just somehow work out. The truth is, financial success comes when you make a solid plan and stick to it.
3. Spending with a plan and later wondering were all your money went to.
Tammy Johnston from the financial guides said, not setting up and using a real budget. Most people have no idea what it actually costs them to in their lives for a year and end up getting surprised by expenses that they knew were coming but neglected to plan for.
Spending all your income can really hunt your ability to save fast toward your financial plan. So you must make sure you create one.
Actually, everyone recommend having a budget. Dave Ramsey calls it giving every dollar a name.
If you don’t tell your money where it’s going and what it’s going to do for you. Probably, it will find it’s own thing to do, and somehow it never finds it’s way into investment account or retirement account.
4. Not knowing opportunity cost.
Business dictionary defines “opportunity cost” as “a benefit, profit, or value of something that must be given up to acquire or achieve something else. Since Every resource (land, money, time, etc) can be put to alternative uses, every action, choice or decision has an associated opportunity cost;
Every purchase can either be a potential investment or the money saved can be a potential investment. Every penny you put into good investments can be worth dollars in the future.
Continues spending time, and money in the company of lowers values, Can’t bring about a winning situation for you financially, although there is time. And place to spend money just for fun but thoses times should be well thought out. So that in the long run you can enjoy the freedom that comes with money.
5. Not paying ourselves first.
Rather than paying yourself first to ensure you have money to save and invest for your future, you may choose to pay yourself last, you may want to pay all your bills, buy any necessities, and have a little fun first. But the problem is always that you’ll fine yourself out of money before you are ready to save.
Even though you are using a budget plan, it suppose to be the no one item on your budget list. You are the most important person so far. Before all bills, you have to make it a priority. To credit at least a ten percent to your own self- account.
But this has to be all together different from your “emergency fund. Emergency fund is a cover of up to six months of living expense why pay your first, is a saving plan were you deduct some certain amount of money (I may suggest 10 percent of your paycheck) to a specific account before all bills toward your future.
- What if your business failed?
- The simplest way to teach your kids entrepreneurship
- How building a beta version of your product get you bound for success as a first-time entrepreneur. (Maximum viable product)
- 17 things to do in your 20s not to regret in your 30s and 40s
- Five insane ways to develop a CEO mindset.