PsychologySavingTips

Popular mistakes made in managing finances

If you are seriously thinking about saving money for some larger purchases, for independent future or for a possibility to invest it, you should be careful about making these popular financial mistakes. If you are making one of them, it can be rather difficult for you to achieve your financial goals.

Treating shopping as a coping mechanism against stress and anxiety

You certainly have already noticed that more and more people are using shopping as a way of getting rid of anxiety and other unpleasant feelings. Indeed, going to a shopping mall for some pleasant but unnecessary things seems to be a working method in decreasing the level of stress or even in escaping from the problems. As you can imagine, such an attitude leads to compulsive purchases which are not considered with a cold head.

One of the major recommendations for managing such a habit is making an exact list of things you need to buy, gen4era;lly plan your purchases for the nearest future and avoid shopping malls altogether. Such pieces of advice are certainly useful, however, the problem of compulsive shopping or even shopping addiction has deeper roots and it is crucial to treat it in a more flexible way.

One of the best things you can actually do is to search for a hobby which will help you to divert your attention from shopping and will keep you really engaged. If you manage to find something which really interests you, you will actually get a lot of more pleasure of doing it than you are getting it from shopping. Obviously, shopping is only giving people a short-term satisfaction which soon after making unnecessary purchases is changing into negative feelings of guilt, dissatisfaction with one’s financial decisions as well as alleviated anxiety related to the fact one has just spent money on something absolutely unnecessary.

By the way, resigning from compulsive shopping behaviour, you will get a chance to save money and spend it on some more expensive hobbies which you had found unaffordable before.

Comparing one’s financial condition to the condition of other people

Comparing oneself to others is never a good idea and making such comparisons when it comes to finances is also a bad decision. Marketing specialists are making people believe they will not be satisfied with their lives or appreciated by other people without material possessions. If you also start applying such an approach to your life and add comparing yourself to other people, this can lead to serious financial mistakes.

Looking at all of the expensive cars and beautiful houses of other people, you might feel they earn a lot more than you and you might get an urge of pretending you are not worse than they are by getting into expensive purchases as well. This is not a healthy attitude to your finances and your life in general. By the way, you never know what the real income of these people is. Actually, the majority of people are making the purchases which they actually cannot afford loaning money and getting in financial traps.

What should really matter to you is not the way you appear to other people, but your long-term financial goals.

Not keeping a track of your finances

While some people are just spending money without tracking the expenses feeling as if they can afford everything since they received their salary a day ago, others are even ignoring the information about their finances in order not to feel anxiety. As you can imagine, this is a very poor strategy for managing one’s budget. It is crucial to know exactly where you are in the financial world especially if you have already borrowed some money from a bank or your acquaintances.

You should know exactly where your money goes and how much you can afford for your monthly payments. In case you feel this issue is too overwhelming for you, you might be interested in finding a financial counsellor or ask your friend to help you keep such information neat and complete in case he or she is good at it.

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