The 5 most common money mistakes you need to stop making in 2018
Via My Body + Soul
Welcome to Hit Refresh. This month, we'll be bringing you articles created by experts that will help you live your best life in 2018. Today, finance and money expert Vanessa Stoykov takes us through the money mistakes we're all guilty of making - and how to move past them in 2018.
After 24 years working in the finance industry as a storyteller and educator, I have learned from countless discussions with financial planners, professional investors and people from all walks of life, that there are 5 big mistakes that people need to unlearn about money before they can get ahead.
I’m sure you know this - especially after Christmas. Buying things we want, rather than need – and racking up debt to do it. While nobody wants to become a grinch, there is definitely a point in your life where you can unlearn wanting stuff. It’s all about opportunity cost. If you don’t buy that now, what can the money you saved get you in the future? The more you understand that buying things traps you into paying off debt and working to afford your purchases, the quicker you start to see desire as something you definitely want to unlearn.
Have you ever noticed the things you focus on usually come to pass? Whether it is good or bad, your focus has energy. Many of us focus on the here and now – today, next week or even next year. While this gets you by, it doesn’t allow you to plan and achieve the life you want in the future. When you make big financial decisions, it’s a great idea to think 20 years out. Will this house appreciate enough to be a good investment? Do I need this overseas holiday now when I could go domestic and put the 5k into my super? These are opportunities often missed because people don’t focus on the long term. Unlearning shorter term focus is critical to building long term wealth.
This really is about the early bird getting the worm. The earlier you start behaviours that build your long term wealth, the easier it is. This is because of the magic of compounding interest. The more your money grows, the more it makes, and start in your 20s and you are going to find your 50s a whole lot easier. While it’s never too late to start thinking about building a long term plan for how you are going to pay for the life you want, it, starting earlier and unlearning time will pay off.
Whether it’s contributing another 5% to your super, or starting an online investment account and putting 10% of your wages there, start young and reap the reward.
One of the hardest ones to unlearn, because this how you grew up. The influences of your parents and community are deeply ingrained in the way you behave with money. Whether you grew up hearing there is never enough, or that money is hard to hold onto, you will have subconsciously programmed that belief into your money habits. Unlearning bad beliefs (and forming positive ones instead) is one of the most important money mistakes you can unlearn. The first step toward this is to think about your beliefs and how they were formed. You can then start to identify what part of that belief set may be holding you back.
This mistake perhaps is one of the easiest to correct. It’s knowing how to access a good long term wealth plan. Unlearning action means to stop thinking you don’t know where to start, and go and get good, independent advice on what to do . Whether it be about your super, your insurance, a savings plan, a budget or debt management, a quality financial adviser can help you put a long term plan in place, and stick to it. And they don’t have to cost the earth. Many advisers take retainers for their advice, from as little as $100, and the plan they help you create can literally save and make you thousands of dollars. Many super funds also offer free financial advice to their members. Whether you have a little money, or a lot, finding a financial planner to help you take action can mean the difference between getting the life you want or not.
If you want to know what you need to unlearn about money, take my free diagnostic test at vanessastoykov.com and stop making mistakes with your money in 2018.
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21 January 2018
Via Daily Mail
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