Worst Money Advices ever

There are a lot of misconceptions about money. These misconceptions are normally the causes of many financial struggles and failures that most people face. Unfortunately, people who follow these misconceptions are a lot more than those who have the right mindset about money and plan and manage their finances well. Get to know some of the most common misconceptions about money and learn how to avoid and correct them. Rest assured you will keep yourself from committing the same mistakes that most people make. Here is a list of such misconceptions and wrong mindset about money and finances.

1.) Money is for spending. Money is a medium of exchange, however it doesn’t necessarily mean that money must be spent all the time. Money can either make or break your life. Well managed finances can make your life a lot better and provide you peace of mind. However, a reckless approach towards finances can lead to lots of trouble. Because of lack of financial literacy and the lack of training and knowledge about financial management and planning, many people fail to realize the importance of money and spend it. This is very evident when people spend too much for leisure, entertainment, and worse, resort to debt for their wants. Money is not used for spending alone. A very efficient and more practical way to use money is to invest it. Investments make money grow and will provide you a good source of income later on in life.

2.) Not looking long-term. Many people look at life and plan short-term. They fail to prepare for long-term needs such as their children’s education, their own retirement plan, or their emergency fund. The result of not looking and planning long term is not utilizing and using their money efficiently in the present. Write down your plans, both short term and long term, and be as detailed as much as possible. Indicate your goals and the amount you need in order to achieve such goals. Rest assured, you’ll be a lot more better in handling your money and not waste it.

3.) Money is unlimited. In an economic scale, many people think that countries can print as many money as they want, that is wrong. The money printed will depend on the economic state of a certain country. For example, if the economy of a country is contracting, less money is printed, and less money will circulate than in a period of expanding gross national product.

4.) Rely on 401(k)s and other retirement benefits provided by the government. The best person to handle and prepare for your retirement and money is yourself. Many people doesn’t give too much importance on retirement planning because they get too complacent because the government will provide them financial assistance once they retire. However, the problem with this is that the government doesn’t really give much and in most cases, what the government provides is not really enough. Save a little consistently for your retirement.