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Wealthy, wise people always know how to avoid these 8 financial mistakes

1. No savings

A lot of people who can make a “fried” coin are always there. They don’t have any money left to save after paying the bills, and at the end of the month are tired of waiting for next month’s salary. They clicked their tongue thinking that those cups of milk tea, coffee or restaurant meals, those things that look pretty when bought and then left at home are really not worth much. However, do not think that 100 thousand dong is not important. If every week you put that 100,000 into savings pigs, you will have 5.2 million dong at the end of the year. What if you keep doing that for 5 years? You will have 26 million dong excluding interest.

One way to make saving easier is to form the habit of creating and sticking to a monthly budget, aiming to save at least 10% of your income before spending anything instead of saving the rest later. when spending.

2. Living a wasteful life in your 20s

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Your 20s are when you really become an independent adult. You graduate from college, get your first paycheck. You can do the things you want but can’t do without money. That’s also when you don’t have as much financial burden as people in your 30s, 40s. Therefore, you are prone to making financial mistakes, spending money lavishly on luxury cars, bags, clothes, etc. eat at a restaurant… instead of thinking about the future.

You are young and have a lot of time to save but can never go back and live like that you are ignoring the power of compound interest. Learning how to budget and prioritize your finances will help you create a more prosperous future.

3. Impulsive shopping, unnecessary spending

A lot of credit card debt comes from buying things you don’t really need. The cool-looking items are on sale, the meals outside the store every day… the value isn’t too great each time, but it can cost you quite a bit of money.

It is important that you know the distinction between needs and wants. Is it something you really need or just want to own and quickly get rid of. If your problem is that it’s too easy to spend by simply swiping your card, give up and go all-cash. You will feel more spending and avoid spending more than you have.

4. Not paying off credit card debt

One of the most common financial mistakes is not paying off your credit card debt. Delaying payments on that high-interest loan means you’ll piggyback off interest and pay more in the future if you only make the minimum payments over the life of the loan.

Debt is an obstacle on your way to building wealth. To overcome it, you need a plan to prevent or deal with the obstacle. It is very difficult to save money when you are paying high interest rates.

5. Delay making financial decisions

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Trying to delay making important financial decisions like paying off debt, saving, investing, etc. is the biggest financial mistake you can make. Many people say that they want to achieve this or that, but instead of taking action, they waste too much time. Weeks, months, even years go by and no progress is made because they think they still have time.

The best advice is to have a plan for your finances instead of always procrastinating, waiting for a certain time to start or settle.

6. No investment

One of the worst financial decisions is the decision not to invest your money. If you think you have to be an expert in the stock market to invest, think again.

You can choose to invest in the stock market, real estate or start your own business… it’s important that you do your research and understand the basics of where you’re going to put your money. Remember the key to a successful portfolio is diversification. “Never put your eggs in the same basket”, ensuring a diversified portfolio is the way to invest wisely.

7. No backup plan

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Not having a backup plan is one of the worst financial mistakes. Having a backup plan will protect you from unexpected and costly incidents. To have a positive relationship with money, you need a backup plan.

This includes an emergency fund (basically the equivalent of 3 to 6 months of living expenses) and the right types of insurance (health, auto, life, disability, etc.) ). These will come into play when your life turns sour instead of taking on debt or losing all of your savings and investments to deal with the situation.

8. Not protecting your personal information

Identity theft and credit fraud are on the rise, and it would be a mistake not to take steps to protect your personal and financial information. A lot of our specific information like address, date of birth, etc. can be easily found by scammers and hackers. Remember to regularly update your credit report, do not enter your data into unfamiliar websites, or share your personal credit information with others.

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