Money Mistakes to avoid in life to make progress

#Money Mistake 1: Starting a Business

Never borrow money that accrues interest to start a business. Only (except if you are paying for it through your salary); only borrow to grow your business.
This is because business takes a long time to gain ground and begin making profit. Yet most loans repayments have to be made within a month of taking the loan or even earlier. Therefore, never borrow money to start a business expecting that the business will generate income to pay back the borrowed money plus the interest.

#Money Mistake 2: Time Not to Spend

Never spend money you haven’t received. Don’t even promise someone money based on a promise you have from someone else. If someone tells you: “Ezra, come to my office tomorrow at 9am and pick Sh30K”don’t go out to buy items on credit based on this promise, with the hope that you will pay off your creditor when the promised money comes; it may not come as promised and this will leave you in problems with your creditors. This is also one of the money mistakes people do.

#Money Mistakes 3: When to start saving

If you want to save, whenever you receive money, don’t start spending hoping that you’ll save what remains. Normally what remains is zero because
as long as money to spend is available, the numerous things you can spend
it on are also available. And things to spend on even incite their
‘relatives’ so that you spend even more than you had planned. When money to
spend is not available, we naturally find a way of doing without it. That’s
why I’ve learnt to save with an INVESTMENT CLUB. Once I send money there I
assume I no longer have it. Before you spend any money, put your savings
aside then spend what is left after saving.

#Money Mistake 4: When Not to Ask for Money

When you get an opportunity to meet a very wealthy person, never ask for
money. Ask for ideas on how to make money. They may even choose to give you
money on their own after seeing that your ideas are great, but let getting
money from them never be your objective.

#Money Mistake 5: Keep your Seed

Keeping your seed instead of planting it. Many people stop at saving. It’s very, very difficult to save and have all you need to maintain your lifestyle especially after retirement. When you save, your savings are
seed; plant it. When you just keep the seed (saving money) some seeds begin
to die (eaten by inflation and the like). That’s why I recommend that you
read about the different types of investment vehicles you can use to grow
your savings. I am not necessarily talking about putting the money in a
business, because you can easily lose money in business. I am talking
about putting it in an investment.

#Money Mistake 6: Who Not to lend Money

Never lend someone money you are not willing to lose. By the time you lend
someone money, be contented in your heart that should the person fail to
pay, you will not die. You should not even lose that person’s friendship if
they fail to repay the money you lent them. If you feel the person might
fail to pay you and this will not affect your relationship with them, then
lend them money. If their failure to pay would make you hate this person’s
entire clan, please advise the person to go to the bank. Never ignore this as it’s one of the money mistakes people do.

#Money Mistake 7: Who Not to guarantee

Never append your signature to guarantee someone on a financial matter if
you are not willing or able to pay the money on their behalf. Do I have to
explain that one? No, it’s self-explanatory.

#Money Mistake 8: Where to keep Money

Avoid keeping money you don’t intend to use in the short-term within easy
reach. For instance, don’t walk with Sh100K in your pocket when all you
plan to do in a day costs Sh20K. Like I mentioned in Money Mistake 3, there
are always expenses available to gobble any money that is within reach, so
if you don’t want to lose it, put it away in a safe place.

#Money Mistake 9: Where Not to keep Money

Avoid keeping money in inappropriate places e.g. in socks, under the
pillow, in a pit, in the sitting room, in the bra, in a travel bag that you
will place somewhere in a bus … impulse buying is a devil that will keep
you busy!

#Money Mistake 10: Spending Money Habit

Spending money on an item that you can do without (at least for the time
being). These days when I pick money from my pocket or wallet, before
paying for something I ask myself: What would happen if I didn’t buy this?
If I find I can live with the consequences of not having that thing, I
smile and walk away. Can you reason why this is one of the money mistakes people do?

#Money Mistake 11: Manner of Spending

Paying an amount for something that’s not the minimum you can get that same
value for. In other words, if you are along Tom Mboya Street and you pay
Sh5K for a shoe that you can get at Sh3K at Muthurwa, that’s a money
mistake except for those who have achieved financial freedom.

#Money Mistake 12: Father Christmas?

Wanting to be the savior of the world by helping everyone in financial
need. My sister, my brother, you are not Jesus. If you find it so hard to
say no to a financial demand, you may think you are practising generosity
when in actual sense you are committing (financial) suicide. We are not
learning to be miserable here; we are learning to live within the
boundaries of reality.

#Money Mistake 13: How much to Spend

Consistently spending all you earn or more than you earn. It’s like having
a drum where you have an inlet that’s smaller than the outlet. It will
never get full. And should the inlet ever reduce significantly the drum
will run dry. If you do it the other way round and the inlet is bigger, it
will get full and even overflow. Hence, we have to always ensure we are
widening the inlet while narrowing the outlet – all the time. Your side
hustle comes in handy!

#Money Mistake 14: Planning Ahead

Thinking about short-term only and forgetting about long-term or thinking
about the long-term and forgetting about the short-term. For instance,
Lydia was told that there’s money in land. She saved money over a long
period of time and bought 30 acres of land. Now she has the land but she is
always broke. She is always complaining. She’s disgruntled and she doesn’t
seem to see herself earning from the land in the near future. Now, let’s
ask ourselves: Having 30 acres of land and no money to feed your family or
take a child to hospital, is that wealth or poverty? I think Lydia only
looked at long-term needs and forgot that she has short-term needs that
require money. What of those who find they are one paycheck away from
salary? Are they thinking about the long-term needs?

#Summary

We have highlighted some of the money mistakes people do. Let’s take stock of our finances. How many of the money mistakes are you guilty of? Do
you now feel better-equipped to do better with these tips? Good luck,
savers! Share this knowledge with your friends because it will not benefit.

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