Money Mistakes

Money Mistakes. How To Avoid Them

“Money is a huge deal in every one’s life. It has to be managed well, otherwise one would run the risk of having financial difficulties in the future” KH Tan, a financial planner.

What are the mistakes?

Not Budgeting
The root of financial problem begin with our failure to plan ahead and set financial goal. Budgeting is the first step of financial success. Budgeting enables one to manage his or her finances and be in control of his or her financial affairs.

Impulsive Spending
Wealth is commonly destroyed because of uncontrolled spending. One cent spend is one cent loss. Unrestrained spending can turn into habit of wastage and create mountain of debts.

Debt Bondage
Credit card is a useful tool but it can be a tool to accumulate debt too. In Malaysia, 1,656 were declared bankrupt in 2006 cause by credit card alone. Nationwide there are 3.2 million being declared bankrupt. According to Bank Negara in July 2010, 50% of credit card holders who had been declared bankrupt were below 30 years old.

No Saving
Locally renowed millionaire, Azizi Ali said “The one essential step to achieving financial independence is learning how to save.” One of the habits of a millionaire is to consistently saving a portion of your income.

No Sound Investment
Conventional saving alone cannot grow one’s wealth because interest rate do not compensate well due to inflation. Therefore, it is necessary to put one’s money in other investment instrument like stocks, bonds and unit trust.