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Wealth is what many people strive for by working hard, saving enough money to spend, and being accepted by society. However, many times the savings we make every day do not make us rich. Sometimes it may be a warning sign that we are having a habit of spending money that prevents us from being wealthy. ACU PAY will tell you 8 habits that are bad for your financial situation, making it impossible to meet your financial goals.
The advice comes from a former bank employee and finance writer Tim Denning of Business Insider. The authors say that having an incorrect financial idea keeps you at bay. Things that can avoid poverty are canceling deposits in bank accounts, using credit cards carelessly, starting investments instead of waiting for the right time, and finding a way to reduce taxes. Let’s check those habits together!
1. Fall in love with deposit
Ray Dalio, the billionaire and founder of Bridgewater Associates, once said in 2020 that “holding cash is like holding garbage.” because the long-term holding of cash is depreciated due to economic recession compared to other assets such as gold, land, and property.
It is true that saving money is a means of life reserve, but having too much cash saved in the account is a warning sign of fear. The author said that he used to be a scared man who liked to save money but never dared to invest, buy property, or invest in his own development, making him stay where he was while people around him had more money despite their low salaries.
2. Do not think that money is not important
Many people like to say that money is not important and a lot of money cannot buy happiness. Most people who say this often have enough money to see that money is not important. In reality, everything in the world today is driven by what’s called “money.” It may be true that money doesn’t make everything happy, but at least having money doesn’t make it miserable. Having money can help you live every day securely, are full, and sleep better than when you don’t have money. So change your mind and open your heart to money that can buy you comfort.
3. Fall into the traps of one’s credit card
In fact, credit cards aren’t scary, but not having discipline is the scariest thing, because using credit cards first and then paying credit card debt later makes many people fall for countless credit card debts. Therefore, make sure that you can repay every time before using credit cards. Most importantly, never forget and pay late. If you are not confident of repayment, consider carefully because otherwise your financial situation will be reduced or your debt will never end.
4. Only rely on motivation to save money, but you can lose your passion
The author says that he is lazy, has no motivation to save money, and has little control over his mind. The more money he has, the more he spends. However, 10 years ago, he set up an automatic debit account. As soon as he got his salary, the salary went into the investment account he created immediately. That was the best decision of his life because he could invest a hundred thousand because of the deducted salary which was transferred to the investment account. Thus, you should use automatic debit in the bank application as well.
5. Take too much time for a wait to invest
Denning says finding the right timing in the investment market is a loss before even starting. Some say property prices will keep falling, others say Krypto will bounce back, or some investors analyze that Google and Microsoft shares will rise again as AI becomes more active, but who knows because the future is uncertain. No one can correctly predict everything. If we don’t start investing, the money that’s waiting will be lost on other things. So start studying investment from now on, as they always say, long-term fixed investments are better than waiting for market time.
6. (Try to) Live a luxury life
In an era when people buy luxury goods on trends or posts on social media, sometimes what they see on social media is not always true. Some may rent a cool supercar, rent a luxurious house just to take a picture with. Trying to buy things like others is not a good idea. The best way is to buy things that are needed and to be conscious of every purchase.
7. Focus on used expenses
Denning says that he sees most people insist on saving money by saving, using discount coupons, going to a friend for free dinner, or being too strict about money usage. If you don’t have enough money, find a way to make more money and add more value to yourself by improving your skills or talents, not only focusing on expenditure.
8. Do not know about tax deduction
Everyone has to pay taxes, but if they pay the same tax but in a smaller amount, and also legally, they can save a lot of money. There are a variety of tax deductions for you to choose from such as marriage tax, Child allowance, Parental Allowance, the SF RMF Fund, or donate to foundations. That’s it and they can pay taxes wisely and increase their wealth.
Just by changing the habit of spending money, it’s not hard to get wealth, as people used to say money buys time, and we can buy time with more money than that.
