6 Mistakes To Be Rectified To Become Rich
This post was last updated on August 16th, 2023
You might be working more than 8 hours a day and you might be sacrificing your health, sleep and even family time to earn more and more money. In fact, this is becoming common with most people that they completely dedicate themselves to their work just to become rich and financially secure. In this highly competitive world, where income is not surging in the same way as inflation and price rise, all the extra earnings gets spent quickly.
Everyone dreams to be rich and wants to live a lavish lifestyle with all the amenities that most of the rich people enjoy. But working hard is just not the right solution. Working smart and managing your money in the correct manner is the mantra for becoming rich. If you want to know the difference between working hard and working smart while managing money in the apt manner, then you need to ask yourself if the money flowing in is being invested in the right direction? If you mostly find yourself with tight pockets, then you must understand that if you want to realise your dreams, you must have a thorough understanding of how to manage your money.
You will have to set yourself apart from the crowd by stopping to follow the money handling and earning pattern of everyone. You need to make an analysis of your earnings and how you tackle your commitments so that you get a fair idea of the disposable income and savings you have. If you think you are doing your best in realising your dream of becoming rich but there is no result, then you must be doing some errors.
You can improve your money handling habits if you read these 6 mistakes to be rectified to become rich and gauge the mistake you have been committing since a long time:
1. You Don’t Have An Elaborate Budget
The major reason why you are not rich is the fact that you don’t know what budgeting truly means. If you think that by assigning a stipulated amount for household expenses and emergency fund, you have done the monthly budgeting, then you are absolutely wrong. Budget is an elaborate description of all the expenses you make from all the income you have and you need to adhere to spending as per your budget as it will clearly show where your money is going and where it is getting wasted.
You need to sit down and prepare your monthly budget on a spreadsheet or on a ready-made budget preparation software available on the internet and analyse all the expenses on the basis of their importance. You need to allot a determined amount for each expense after cutting down the unnecessary expenses. This kind of elaborate budget will show you a clear picture about your present financial condition and you will be able to judge the time by when you can expect yourself to be self sufficient.
Recommended read: 13 Easy Tips To Save A Large Chunk Of Money
2. You Have An Indefinite Saving Pattern
Saving is more important than satisfying present needs as future is unpredictable and there can be any emergency for which you may require funds. You need to save money if you wish to indulge in some high budget expenses such as purchasing a car, house or going for a vacation abroad. You must also save in advance for your retirement, children’s education or for setting up an enterprise. If you save as per your will or you don’t feel like saving in a particular month to cater some other expenses, then you will not be able to finance the above major expenses in the future. You must have a definite saving pattern and you must stick to it even if you have less money for meeting your monthly expenses.
3. You Have A Long List Of Creditors
You are left with less disposable income and even less savings if you have a long list of creditors. If you are in long term debts, then it may take decades for you to repay and you may eventually have lesser savings. So before you embark on any decision in regards to applying for loan or borrowing money from your friends, then analyse your repaying capacity first. In case you want to buy a house or open a new office or plan your wedding, then you must think of finding out an economical plan of action so that you don’t have to sacrifice your money by paying through credit cards, where you keep on paying the added interest for years. Your money spending and saving habits should not drain your savings as it will eventually destroy your dream of getting rich.
Recommended read: 6 Things That Prove Money Can Buy Happiness
4. You Are Not A Disciplined Shopper
If you are an impulsive shopper, then you need to change your spending habits. If you go to the supermarket for purchasing household goods without a proper list and you end up picking unwanted items as they were on offer or sale, then you are an indisciplined shopper. If you fail to say no to the promotional offers being buttered on you by the salesperson, then you will not be able to have positive net worth. You need to prepare a list of all the necessary items required and with a staunch set of mind, just hit the supermarket and shop for items as per the list. Don’t let yourselves get tempted to make impulsive purchases which you will repent later. Shop for the whole month in the beginning of the month itself and wait for the next month to shop again.
Read: Effective Money Saving Methods On Grocery
5. You Are Over Spending On Improving Lifestyle
If you get a promotion in terms of position and remuneration in your office, then don’t let the appreciation kill your logical mind. Don’t give yourself an excuse to go for shopping for things you always wished for. It is okay if you celebrate your promotion by throwing a low budget party to near and dear ones at home but purchasing luxury items out of them, when you actually have an opportunity to augment your savings, then it is an act of a fool.
Read: 9 Ways to Avoid Lifestyle Inflation – Spending Less When You Earn More
6. You Are Not Insured
Most people feel that paying monthly insurance premiums will deteriorate their amount of savings and disposable income. But the truth is that if you spend this small portion of money in paying those premiums, then you will not have to shell out a large chunk of money in case of any mishap. You must invest in purchasing health insurance, automobile insurance, home insurance, etc. You will never regret paying the insurance amount per month but if you don’t, then you will surely regret at the time when you will have to pay a lump-sum amount that will ensure that your savings get exhausted.
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Snehashree Bhat
A young writer who loves to pen words from creative perspective. Passionate internet surfer, a versatile homemaker and a person who finds pleasure in adopting healthier and positive changes in her persona. An enthusiastic feminist who wishes to make serious changes in the stereotypical thought process of the society via the voice of her words.
