Image Credits: Freepik
It's time!
We have finally entered the last week of 2022. Yes it's happening!
It will mark a fresh beginning, the end of an earlier stage, or even the beginning of a new financial phase of your life.
Looking back at your list of financial goals for 2022, you might be considering: "There is still so much to do, argh. So much still has to change!"
Do you intend to start the year 2023 with the same financial objectives you had last year? Or, are you thinking of continuing the same old monetary practices that didn’t work in 2022?
Of course, you need to start 2023 with a “New Year, New Money” motto. And, in order to do so, you need to leave some mistakes right here in 2022.
Interested? Heck yes! Let's look at some bad financial habits you should avoid:
1. ‘Crave’ Spendings!
Image Credits: Pexels
That boba tea might not look like an excessive purchase or overspending. But imagine if you get one every other day for a whole month? Yep, there goes the money for your savings account!
You're probably thinking, "Dude, a person can't sip their tea in peace now?" You can, for sure. But here's why you need to think about reducing these 'crave' expenses:
- Say you spend a whopping $35 on your coffee, tea, or any beverage per week. Well, it seems like nothing but when you do the math, it totals to $1,820 a year!
- Now, suppose, in 2023, you decide you reduce the budget to only $15. Congratulations, you managed to save $1,040 that you can put to use in other financial categories.
You can use it for your savings, emergency, retirement, or any investment account. Here’s a helpful video explaining how you can restrict yourself from unplanned spending:
2. Debt Payments All Over The Place!
Image Credits: Pexels
In keeping with the previous error, when you give in to your crave spending and wind up purchasing more than you had anticipated, there is a greater chance that you have ruined your 50-30-20 budget!
And, when that happens, the next mistake enters the chat: your debt payments go all over the place. Why? because there’s no tracking of money anymore.
- The money that was originally intended to deal with your debt payments now has gone to your overspending.
- And, that affects everything!
Now, all your budget is disturbed. In fact, you might need to use the money fixed for your savings or retirement to pay the bills. Yes, exactly, that’s why you need to fix this first right when you enter 2023!
3. Pushing Things To The End!
Image Credits: Freepik
What’s the best thing you can do for your account? Managing your money wisely!
Do you know what’s the worst thing for your credit? Making late payments. And, even worse, straight up missing them. That happens when you push everything money-related till the end.
In fact, experts say to pay your bills 3 days before the actual due date. This way you can make sure there’s no delayed, missed, or late payments included in your credit history.
Related Article: Is It Better To Pay More Than Minimum On Your Credit Card?
4. No Investment Planning!
Image Credits: Freepik
Do you still think your 9-5 job is going to help you with your early retirement? Do you really believe hopping on one or two side-jobs on the weekend will do any good to your savings?
Well, if you answered yes to these, you need to rethink your financial goals! No cap!
When we say, investment is the game changer, we are not playing. Here’s why you should include investment planning in your financial objectives for 2023:
- With investment, you are using your money to build a decent wealth,
- You can outplace the rising economy and inflation with the right investment plan.
- In short, you are actually increasing the value of your money by investing.
That’s the key for rags to riches and your way to becoming the next Warren Buffett!
5. Budgeting With Loopholes!
Image Credits: Pexels
A budget with loopholes? What does that even mean?? Let us tell you!
Question yourself, do you have excessive cash at the end of the month?
You have paid your secured credit card bill, the savings account is all set, there’s money in your retirement account, and yes, you have added something to your emergency fund too - did you answer yes? Now that’s a loophole!
|
Do you still have extra money after all your payments? That’s not a success! It merely suggests that you didn't start out with a solid financial strategy! |
Yes, having excessive money even after you categorized every buck and planned all your bills is not the objective. It simply states there’s a loophole in your budget and your financial planning.
6. Ignoring Financial Stability!
Image Credits: Pexels
What’s your purpose for earning money? Having financial stability!
However, that doesn’t happen overnight. In fact, it also doesn't happen just like magic or anything. In fact, it’s a slow process that demands your patience, attention, and energy.
Like, you really have to put your blood, sweat, and tears to achieve financial stability, security, and freedom.
- Find a risk-proof investment,
- Create a foul-proof financial plan,
- Make an effective budget,
- Right your wrong spendings,
And, literally analyze and evaluate your financial progress. Only that way can you find whether or not you’re moving in the right direction.
7. No Emergency Fund!
Image Credits: Freepik
If we have to name one lesson the pandemic has taught us, it has to be the ‘uncertainty.’ Like, life is so unpredictable, you never know what’s awaiting you in the future.
All the reasons why you must focus on having an emergency fund in 2023!
However, that’s not possible if you have been planning your finances wrong (see #5). Because when you do so, there won’t be any space for you to create an emergency fund.
So, while entering the new year, you need to adopt a new financial mindset that covers every aspect of your life!
8. Zero Credit Check!
Image Credits: Freepik
It’s okay to check on your credit once in a while. No, it won’t do any harm to your credit profile. In fact, it might change it for the best!
- You can see inquiries on your Equifax credit report,
- You can analyze your financial progress,
- You can check on your credit score,
- You can find the errors on your credit report,
- You can ensure there’s no fraudulent activity.
Simply, making sure that everything is fine and correct when it comes to your credit. And, that’s only possible if you remember to check your credit regularly.
9. No Retirement Planning!
Image Credits: Pexels
The last point in our financial mistakes to leave in 2022 might be the most important one. Well, even if you don’t consider it to be the main, it definitely is a prime one.
Do you want to retire before your late 60s or even 50s? You need to plan your 20s or 30s to achieve that!
You can’t choose so randomly at one point in your life. There are a lot of thought processes in retirement, especially early ones.
So, when you decide on your financial resolutions for 2023, make sure to add “retirement planning” or “early retirement” to the list.
Conclusion
A healthy financial profile can give you peace, serenity, and convenience.
However, when you practice bad financial habits for years, all of these slowly start to fade from your life. And, that’s exactly why you see people struggling with money even in their 50s.
A time when they should be planning to retire in a few years. Instead, they stress about their earning and income when they retire. Do you not want to live like that? We can help you!
We have mentioned 9 mistakes you can avoid to make sure that 2023 will be the best financial year of your life with many more to come! :)
