6 Money Mistakes Everyone Makes

Providing for others when you are lacking yourself, overindulging, and ignoring debts are all reasons why you are always broke.

Everyone makes financial mistakes. The important thing is to learn from them so you don’t repeat them in the future. Here are the 6 worst money habits that most people are guilty of.

1. Provide for others when you are not well off

In many families, children are responsible for providing money for their parents. It's a nice gesture, but you should still think carefully about how much you spend.

The rule is to leave enough money to cover living expenses as well as to save for the future. Remember, you have to take care of yourself before you can help others.

2. Going to college without a specific plan

We’ve all been taught that college is the safest path to success. But the truth is that many graduates are unemployed with huge student debt.

Not all fields require a college degree. If you feel that college is not necessary for your future path, don’t limit yourself. You can still be successful by gaining experience and learning outside of school, instead of chasing after a degree.

3. Invest in housing

A home is a place to live and not a safe investment. You may hear about people selling their homes at bargain prices, but don’t forget that they also spend a lot of money to maintain and repair them.

If you are thinking about settling down, carefully calculate the cost of owning a home. Only then can you decide whether to buy or rent.

4. Overindulgence

It's hard to say no to a fun party, but if you keep saying yes to every invitation, you'll soon go bankrupt.

Exciting experiences are an essential part of life, but you have to make sure you’re spending money on something that really matters. Many people who appear to be well-off when they post pictures of their vacations or buy luxury goods on social media have actually struggled to save enough money.

5. Ignore debt

Many people ignore overdue bills when they are reminded to pay them. This only adds to the debt and affects your chances of getting approved for future loans. Worse, you could be sued.

The solution is if you can't pay your bills on time, call your lender and explain to them that you really want to pay. This way, they may be able to give you some flexibility.

6. Withdrawing money from your retirement account too early

Opening a retirement account when you’re young is a smart decision. But if you take money out of it and spend it on things you don’t need, it’s a mistake. You’ll lose both money and interest.

You can withdraw money for legitimate reasons such as investing in education or in case of disability. But think carefully before deciding.

Here are 6 ways to fix these mistakes:

- Track income and expenditure

- Adjust spending appropriately

- Don't try to ignore debts

- Save

- Open a pension account

- And don't copy the bragging photos on social media.

According to VNE