You can still recover from your financial mistakes

 | Filed under: Personal Finance | Posted by: Editor

You may have made some desperate financial choices when you are starting out your financial life. Such choices may affect you for the rest of your life. Sometimes it is difficult for such financial mistakes to clear up or may take a while to fix.

Experts say you stand the chance of saving more money when you avoid costly financial mistakes. Apart from that they said there is need for you have better understanding of you common financial flaws which will consequently help you to make better financial choice in future.

Phillip Ikechukwu was a retiree of one of the companies operating in Lagos who invested all the money he earned from retirement into a business without proper plan and at the end of the day he lost the business. Instead of allowing the business to grow before he can reap from the profit, he was at the same time spending the money put into the business until the capital was eroded. This should teach a lot of people lesson.

To avoid financial mistakes, Miriam Caldwell, personal finance specialists said first, you need to identify what the mistake was, and why it happened. This will make it easier to stop making the same mistake.

Secondly, she said you need to create a solid plan that will allow you to recover from the mistake. A budget should always be part of that plan. And finally, you need to make sure that you do not make the mistake again. You can create habits that you can use to avoid making the same mistake.

One of the biggest money or financial mistakes a lot of people make is failing to make their personal or family budgets.

When you do not have a budget, you do not have control of your finances. Failing to budget month after month means that you are not taking control of your financial situation. It can be difficult to reach your financial goals when you do not have a solid budget in place.

Take the time now to set up a budget, and continue to do it every month. You can begin to make better financial decisions if you are budgeting and you know exactly where your money is going each month, Caldwell said.

Another financial mistake is borrowing money from friends and family. When you are in a tight financial situation, you may be tempted to borrow money from your friends or your family. When you do this, you put strain on your relationship with them.

They may begin to question your financial decisions and feel like they can make comments about your spending habits. They may also need the money back suddenly or you may feel guilty whenever you see them. You should also never loan money to family or friends to save your relationship.

Never setting financial goals is another money mistake you need to do away with. Your financial goals give you steps to work towards. These goals should be things like home ownership, starting your own business, retirement. If you do not set specific goals, you will flounder. You may never get to the point where you have a down payment save for your home or be in a good position when it is time to retire.

Take time to set solid financial goals and review them each year, she said.