5 Easy Steps to Ruin Your Finances 1. Lifestyle Costs above Your Income! Bravo! You are earning a six digit monthly income of P100,000 but your lifestyle expenses for the month accumulated to P120,000 or sometimes, even higher! So, even if you are earning that much every month, you still have a negative cash flow of P20,000 which makes you poorer by P20,000 per month or P240,000 a year. The problem of some yuppies whose income rocketed quickly is that their lifestyle cost also went up quickly and sometimes, faster than their income. So make sure you live above your means if you want to really dig down your financial status. healthy-inflation They said that one of the secrets of the rich is that their lifestyle cost plateaued even if their income grows, thus, creating more excess cash for them to reinvest or create new money machines. They have reached their happiness tipping point. According to Marist Institute for Public Opinion, 1,235 Americans have found significant differences in almost all aspects of happiness between those who earn less than $50,000 and those who earn more—measures of their quality of life, free time, health, spiritual life, feelings of loneliness, expectations about aging, etc. 2. Treat your Credit Card as Free Money! I am sure majority of us are guilty of this. It is ok to use your credit cards especially for the convenience and rebates it gives but never ever treat it as a substitute for cash (plastic cash). It will never be. Many of us rely our purchases on our credit limits rather than our cash bank balances. This is way too wrong because most likely, your credit limit is higher than your cash balance. images Moreover, study shows that if you use your credit card to shop, you tend to spend more as compared to using your cash because when you use your cash, you can physically see the money being robbed away from your wallet which helps you think twice before making any purchase. This is a real challenge for us since credit card companies gives us freebies and promos just for us to swipe our cards. Free cake or coffee or meal or movie pass in every P2,500 purchase? Sounds familiar? Are those freebies worth it considering the item you bought so you can avail those freebies? Again, this is a sure way of ruining your financial life. 3. Be an Impulse Buyer! I myself is guilty of this! I have this tendency to buy things on an instant. Last Friday, while browsing the net, I saw a Samsung S5 for sale at P24,000 only. Saturday morning, just 10 hours after I saw it, I met with the seller and closed the deal without testing the phone. Sadly, after trying some features, the camera has defect. Sadly, I am trying to call the seller but to no avail, his phone is cannot be reach! I was fooled! I broke my rule in spending which is to think hard for it in two weeks and evaluate my feelings if I really need the item. Why would we deprived ourselves right? We worked so hard. It is time for rewards!!! Ipad Air? Out of town travel? It is ok really to spend and splurge but make SURE that everything is within your Play Fund! 4. Impress others always! Have you seen the social cost of investing video clip produced by Pesos Sense as portrayed by Ping and Pong? When you try to lessen your expenses and start planning your finances properly, there will be drawbacks in doing this. Some would belittle you or sometimes, you are being outcast because you do not join their weekly partying or dinner in exclusive restaurants. Moreover, being involved in the consumerism world and dictating your lifestyle. Get that “LV” bag instead of an ordinary reliable bag. Buy a sports car rather than simple eco-friendly car. We sometimes depend our happiness and self-worth on materials things without knowing that these are for short term gains only. Find your real happiness that money cannot buy and last for a lifetime. On the other hands, go on and buy those things and try impressing others while putting yourself in debt hole. 5. Procrastinate Stand still. Do not do anything. Risk nothing. Go with the flow. Do not read books. Miss good seminars. Be in your comfort zone. Practice analysis paralysis. Do not fire, just aim. Be lazy. Play video games or watch teleserye all the time. Hang out with toxic people. Be satisfied with your income. Be contented. Do not be hungry. Do not be foolish. Keep that fire small. Always think of what would others say. Invest and save when you are about to retire or get insurance when you need it! What is the main point of this article? Do these 5 things and you are in your way to financial disaster. Avoid these things and you are building your bridge towards financial freedom. 18fc42loobv78jpg Key lessons are always be yourself, ignore the noise, live below your means, be a mindful consumer, live simply and create that excess cash so that you can start your income multipliers by investing in yourself and these money machines: real estate, business and paper assets. - See more at: pinoyfinancialplanning/5-easy-steps-to-ruin-your-finances/#sthash.W5eF1fFR.NG188bBW.dpuf
Posted on: Mon, 07 Jul 2014 05:59:45 +0000
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