There are bad financial habits that may land one in poverty if not corrected, and quickly too.
Inability to live within one’s means, keep a budget or save for the future, predispose the individual to inevitable poverty in the future. The longer you keep up such behaviours, the more likely you are to continue with them and end up in poverty.
Spending more than earnings, failure to save
Those who spend more than they earn are bound to financial failure in the future. Healthy financial attitude requires that for every kobo spent, an equivalent amount or more is saved.
Some expenses like hospital bill, school fees, and utility bills are inevitable. Fees and utility bills may wait but a hospital bill will not. This is compelling reason enough to put aside some money for the unexpected.
In a situation where earnings are so meagre as to make savings difficult, effort has to be made to explore more streams of income. This way, financial stability can be attained with time, and some earnings saved.
Spending against budget
Spending against budget or not keeping a budget at all makes it difficult to manage money. Keeping a budget presupposes that resources are scarce. Therefore it is important to know how much you are spending, or how much you can afford to spend. Without a budget, it can be easy to overspend, and to forget to save enough.
To manage your money properly now or in the future, learn how to budget and keep to it. If you have not been doing so, begin now to create a budget, weekly or monthly.
Determine how you are spending now, make goals, and track your spending. Keep a portion of earnings as savings, no matter how little. Better still, for every naira spent, another naira should be saved.
Saving for retirement
Many are yet to realise that saving for retirement should be one of the biggest goals during active work life. This is why many workers fail to put any money away for retirement. Of course, such people end up working life time.
Do not make the mistake of waiting till later to save, or neglecting retirement savings completely. It will be difficult to live life after retirement if you do not save enough now. Retirement is inevitable and the earlier you start putting aside money for retirement the better.
Impulse to buy everything new
There are many items you do not have to buy new. One can buy used cars and children’s clothing which cost lesser than new ones. It may be quite an exciting experience buying new things but if you buy everything (or even most things) new, you will be setting yourself up for a fall down the line.
New items usually cost more, and in addition, they are not always necessary.
There is no good reason to spend the money to purchase everything new, and doing so could eventually trick you into thinking you need to purchase items new. Then if you cannot afford the items, you have a hard time managing your money because you still want to purchase new items.
Not saving for emergencies
While retirement savings should be an essential part of your budget, you also need to save for emergencies and other items. You should also be building an emergency fund so that you are prepared when an emergency strikes.
Without proper savings, and especially without an emergency fund, you risk having to borrow money when you need to pay for something down the line. This can set you up to be in debt later, which will make it difficult to manage your money.
