What are some financial mistakes you’ve made in the past, and what did you learn from them?


Two months ago I went to a second hand store to buy a cupboard. The plan was to refurbish it by repainting it. But unfortunately after two days of working on the cupboard, sanding and priming it for paint, one of the handles fell off. So I fixed it. Later on, the foot of the cupboard came off. This was the most irritating part of it. I knew returning it would be a hassle since most used furniture is sold as-is and without any guarantees. I parted with R 400 for this stupid cupboard. I counted the cost and it looked like I was going to pay more than I had anticipated to fix it. I have now parked this DIY project for later.

You work hard for your money as I do. When we make financial mistakes, those hard earned rands seem to fly right out the window. Even worse, often times, we don’t even know we are actually making a mistake at all. 

It’s human nature to make bad decisions, especially when it comes to handling money. That shouldn’t come as a surprise to anyone, though. We all make financial mistakes from time to time. There are some purchases which I wish I didn't get into early on in my life. And the only time when I got the lesson is when I was already deep into the problem.

I’ve learned a fair number of lessons about what works – and what doesn’t.  Here are some of the most common financial mistakes that we make and what you can do to avoid them…

1. When it comes to money, as in life in general, the difference between success and failure is usually in the choices we make each and every day. Not in some monumental decision that goes good or bad once in a lifetime. Many of the millionaires who find themselves bankrupt get there, not by making some huge investment mistake - although that is known to happen. Rather they get there gradually by making bad choices on a daily basis. One of the things I've taught myself is when I find myself in a pickle I have to calm down. Otherwise, I'm headed for another disaster. Most of us, when we realise we've made a blunder, we try to fix it immediately. But if you are unsettled within, chances are you will make another bad mistake. So teach yourself to stay put and think things through before you make your move.

2. One of my favourite saying is money reveals our hearts. Let me ask you this question: when your friends ask for money all the time or your partner spends without thinking, do you take the time to ask why or do you sulk and stop talking to them?
If the latter is your answer then, it means you value money over your relationships. I used to think that relationships and money don't mix. But I've since changed my mind. Some of the best relationships I've had were ruined because I didn't try to help my family or friends find a solution to their financial problems. Instead, I got angry with them for making me their "bank" account. I allowed money to dictate the level of our bond. Money is important but our relationship are more important. And to show how much we care, we should learn to be patient with those we claim to  love.

3. One thing is for certain: none of us know what tomorrow will bring. Insurance may feel like a costly payment each month, but without it, you’re exposing yourself and your family to the potential of a much larger financial burden. I have shared many a times how insurance could have solved many of my problems. If you have an established family, you need life insurance to cover the costs of what already have. Plus, over the years, you’ll find comfort in knowing money will be available to protect your loved ones in the event of your passing.Your home insurance policy is equally as important as your car insurance policy. You will be extremely happy that you have home insurance if your home is damaged or destroyed especially when finances are tight.

4. We all have dreams homes. But there is a difference between a house you can afford and a house you desire. If you purchase a house because of the later, your dream home can turn into your worst nightmare if you don’t consider the total costs associated with homeownership. It is crucial to remember the monthly mortgage payment is only one piece to this expensive puzzle. If the house payment is high, other expenses like utility costs, higher repairs and maintenance seem to follow suit. One of the reasons so many people have lost their homes in foreclosure is because they were tightly stretched on their house payment to begin with. Do your homework and don't allow agents push you into buying a house you can't afford.

5. You recognize the importance of diversification regarding investments. The same line of thinking goes for our income as well. If, for some reason, your single income source goes away, you could truly be stuck. An emergency fund will definitely help for a period of time, but your sense of financial security may be shaken at this point.
Even if you are married, don't rely on his or both of your salaries only.Separations and divorces happen. Starting over is always expensive. As women, we are often given the full responsibility of taking care of the kids. If you are in business, professional divorces also happen and they are pricey. Breaking up with your partners or closing a business can have a devastating financial impact. Don't gamble with your future. If, for some reason, your single income source goes away, you could truly be stuck. Always have a side hustle or something that is easy to generate money for you.

What are some financial mistakes you’ve made in the past, and how did you learn from them? Let me know in the comments below.

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