Do you want to know the 5 main reasons why you can’t achieve your financial goals and attain the lifestyle you dream of? In reality, you probably already have an idea, but these reasons need to be not only obvious but also consciously acknowledged. Only then can you eliminate these problems and work towards financial freedom without living from paycheck to paycheck. The first and simplest step you can take right now to achieve financial freedom is to download the loans app on your smartphone or tablet. This tool will provide you with useful financial advice to help you manage your budget more effectively, and if you suddenly need money before your next paycheck, you can easily get the required amount within the app without unnecessary hassle. It’s your personal assistant and a sincere friend always ready to help.
Why Can’t You Achieve Financial Freedom?
In his book “Personal Finance,” Eric Tyson presents the results of sociological research and explains all the reasons why finance is the area where most people face difficulties. Analyzing the causes, the author concludes that he made each of these mistakes for a long time. Correcting them allowed him to overcome his personal financial crisis and reach a level of life that was most comfortable for him. He also points out that it doesn’t matter whether you earn $2000, $10,000, or a million — money will always be insufficient if you approach its distribution and use it inefficiently.
TOP 5 Reasons That Make You Live from Paycheck to Paycheck
Emotional, Impulsive Purchases
Let’s say you receive a certain amount and allocate it to categories to make it last. However, your favorite store offers discounts before Christmas or Black Friday. Suddenly, you find yourself with a pile of packages and items you wouldn’t have bought without the extra incentive. The situation becomes critical when these purchases are made using consumer loans or credit cards. While a single instance may not seem catastrophic, marketers make every effort to make you buy more and pay attention to things you could easily do without for a long time.
The best way to combat the desire for impulsive purchases is to budget for unplanned expenses in advance and try not to exceed this amount. This will help you manage the urge to treat yourself, deal with emotions, or take advantage of a lucrative offer without overspending.
Lack of Planning
If you receive your salary and spend it as needed, it may seem like you have enough for everything. However, usually, this approach neglects retirement savings, investments, savings for creating a financial safety net, and expenses for various courses that could help you advance your career and earn more. Moreover, on the eve of payday, you’re left with $20 for coffee.
Create a habit of maintaining a personal budget. This can be done through an app, in Excel, or even in a notebook. Record your income, expenses, and financial plans for the month. Try to adhere to this course strictly. Over time, you will notice significant qualitative changes in your financial situation, even if you receive the same salary during this period or face temporary difficulties.
Using Financial Products with Hidden Terms
Buying certain things on credit can be a cost-effective solution: seasonal items change in price, and current products become more expensive. Therefore, people often use credit cards or other financial products, and this decision seems beneficial. However, the terms of using such products may differ, and it is the consumer’s task to study the conditions and rules. Usually, this information is in small print and is not mentioned in advertising. For example, settling with a credit card in a store may be a good solution, but transferring this amount to another card involves interest and fees. Therefore, whether you overpay or not depends on how carefully you study the offer.
Lack of Understanding of Useful and Useless Purchases
If you take out a mortgage to stop paying rent, it’s a useful purchase. If a new car helps you earn more, it’s also a necessary and important item for your future. On the other hand, ordering status items or taking out a loan for a luxurious vacation may lead to debt.
Differentiate your expenses into useful, promising ones and those that can lead you into a debt pit.
Lack of Savings
Creating savings is not the same as constant savings on everything. It’s about a rational distribution of funds, where 10-20% is set aside monthly on a deposit that you can use in case of job loss, medical treatment, etc. With this approach, you will feel secure, no matter what happens.
These simple reasons and rules can change your approach and, consequently, your overall financial situation!
