We all have the right to make our own decisions from a certain age, which includes our financial decisions.
You answer to no one when it comes to your finances or any other aspect of your life but some financial decisions you make can be very bad for your finance in the future.
Here are 5 bad financial decisions you will regret.
1. Having no budget
This is one financial choice that can be a very bad decision.
You cannot live your day to day life without having a budget. People tend to avoid budgeting because they feel it is too stressful to create and keep up with a budget.
A Budget is not only meant for people who are struggling financially but also for those who have a steady and stable income.
Having a budget is important to help you plan your expenses.
Without a budget, you have no idea how you spend your money which makes it hard for you to achieve financial goals.
2. No financial plan and goals
If you have no financial goal or plans for yourself, there is a high chance that you might be in one spot financially for a long time causing you to be financial stagnant.
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Have financial goals you want to achieve in a short period and also long-term.
Having financial goals also means you would have a plan to achieve these goals. Without a financial plan, you might find it hard to achieve your financial goals.
3. No savings and emergency savings fund
If you have no savings and you keep spending without thinking of removing a substantial amount to put into a savings account, then you might have a bad financial situation in the future if you don’t change.
Having a savings can either be used for a short-term goal or a long-term goal. Anything you want to achieve financially within a period of time should be based on your savings.
Same goes for emergency savings fund.
There are situations that can come up which are not planned for and would require money to sort them out. They are called emergency situations.
If you don’t have an emergency savings funds, it can affect your finance negatively because you tend to take out of your steady income to sort such situations out.
4. No investment and only one source of income
If you don’t have any investment that can yield good result in the future, then you should consider doing so soon.
You should have an investment to make you more stable and stronger financially.
You could invest in real estate or buy lands, lands never depreciate but always appreciates, or you could invest in stocks.
You should also have another means of income totally different from your main source of income. Get a side hustle so you can generate more revenue for yourself.
You can put the revenue into your savings or emergency savings funds without having to worry about your main source of income.
5. Not planning for retirement early
If you think you don’t have to plan for retirement at a very early age, then you are making a very bad financial decision.
You need to start saving for retirement when you start earning an income.
It might seem difficult to be planning for retirement at such an early period when you still have a lot of financial obligations and responsibility to meet but you must make possible means to have it in mind and start planning towards retirement early enough.
Don’t wait till you are 40 till you start thinking of making plans for retirement. The earlier you start planning for it the better.