While many of us are under the impression that the events of 2020 had hardened our economic resolves and financial competencies to a level that can weather any future market downturns and turbulence, the vast majority of us still have a long way to go as entrepreneurs. In fact, we’ve barely scratched the surface as to what it means to be smart and sound with our money because the road up ahead is unadventured, and there’s no telling what else can happen with the world still at the mercy of the global pandemic.
What’s worse, the surge of financial enthusiasts and inspired newbie entrepreneurs has also caused a resurgence of bad spending habits acclimated to the new normal, slowly yet surely hurting most people’s hard-earned cash without them batting an eye. And so, today, we’ll be going over some of the most common money mistakes you might be overlooking and the best way to do away with them.
#1 Expensive Entertainment Bills
Being isolated at home for more over than a year now has its benefits and equitable consequences. If there’s something we’re all guilty of doing, then it’s scrambling for any form of entertainment possible, be it binging movies or playing with your buddies online. However, because social stimulation and “fun” activities at home are limited, many succumbed to overindulging in entertainment and consequently racking up hefty bills in the process.
Unnecessary Monthly Subscriptions
There’s nothing wrong with staying updated on all the latest Netflix shows, but you can’t quite possibly need every single monthly subscription available on the AppStore. In fact, it’s almost impossible to keep up with every single series and film that pops up every month on streaming platforms because you lack the time. So, try your best in dialing back and canceling some of your monthly subscriptions.
Unconscious Lifestyle Inflation
We acknowledge the need to spend a bit on yourself for relaxation, but many of us mistake the beginnings of lifestyle inflation for a simple cheat day or one course of spending on your wants. And while spending for yourself is acceptable, sowing the seeds for lifestyle creep to get you from behind is one surefire way of ruining your finances.
#2 Cutting Yourself “Too Much” Slack
Cutting yourself some slack can be interpreted in many ways, for example, taking a break from all the grueling hours of remote work or holding off on your side hustle to make some time for more personal attention. However, what we refer to as cutting “too much” slack is using Covid-19 as a scapegoat for bad financial decisions. Yes, we know that there are scenarios far beyond control, but there are decisions you have complete jurisdiction over that will at least guarantee your financial security.
Shortchanging Your Savings Plan
Long-term savings and emergency funds are built for trying times like we’re experiencing today, but it shouldn’t mean that you stop building them during challenges. Many people excuse themselves from saving and allow extra spending and bending their budgets because of the financial dissonance. However, now’s the crucial moment where being strict and responsible with money matters most.
Gratuitous High-risk “Investing”
We’ve seen a rise in the trend of investing in meme stocks, aggressive crypto-investing, and the like, but while these are financial instruments capable of generating life-changing returns, the vast majority of new investors are going in blind. Many have fallen victim to following the bullish momentum only to be sullied by a sudden bearish signal that wipes their capital, so avoid gratuitous high-risk investing because it ends up resembling just gambling.
#3 Deprivation Of Fun Activities
Last but not least, while being strict and stern with your money management principles is commendable, you also don’t want to overstrain yourself from having any fun. Any self-deprivation, regardless of good intentions, almost always comes back around hitting you where it hurts most. And you might end up doing the things you set out to avoid in the first place.
Motivation And Passion
Both motivation and passion go hand in hand, but we also can’t expect our passion for personal finance to endlessly fuel or motivation despite intrinsic beliefs. We naturally experience highs and lows in drive, and engaging in fun activities helps mediate the times when you feel low.
Just Don’t Go Overboard
Of course, don’t go overboard with your search for dopamine-inducing activities and that thrill of the moment because you could also end up flat on your back with a new problem. For example, you might be on a night out with the boys only to wake up at the break of dawn needing a professional DUI lawyer.
Successful Entrepreneurship Begins with Personal Money Management
Overall, while times are certainly tough, we shouldn’t let circumstances get in the way of our personal money management. Remember, a successful entrepreneur exhibits alertness and resiliency, so take the emerging challenges of the new normal as a test of your grit and skills.