Yorkshire men are known to be careful with their money.
Apparently mothers stitch up their son's pockets. :) UK
10 Money Mistakes
Successful People Don’t Make
Bruce Harpham
Managing money effectively is
a key success skill. Successful people make the decision
to become effective with
money, many of them early in life. Like any area of life,
it is important to educate
yourself about the threats and challenges in the world.
Taking the time to master a
few key principles will pay off for years to come.
1. They don’t overspend;
they live on less than they make.
Living on less than you make
is an essential money management skill.
Some of the world’s
wealthiest people have taken this principle to heart.
For example, Sir John
Templeton, a legendary investor who became a billionaire,
saved 50% of his income even
when he grew up with limited means.
If that is more than you
manage, don’t worry!
You can reach financial
success by saving 10-15% of your income.
Tip: Learning to live on less than you earn
takes time. Start by looking for ways to save money.
2. They don’t fixate on
price; they understand the importance of value.
The price you pay for an
investment, a meal or piece of clothing is only part of the story.
Successful people also think
about the value of that good.
For investments, they
consider the prospects for the investment growing in the future.
For personal items, they look
for high quality products that will last.
For example, a well made pair of
business shoes may cost $200 or more
but these shoes can last for years with
proper care.
Tip: Buy high quality products that will
last for a long time.
3. They don’t waste cash
on fees and interest; they know how to manage their banking
Carrying a balance on your
credit card is incredibly expensive and sadly common.
According to CNN, the average American household
carried over $15,000 in credit card debt. Successful people also keep an eye on
their bank fees–how much they pay for ATM use
and other transactions. These
fees are easy to avoid with planning once you understand
how the system works. Simply
reviewing your financial accounts for 5-10 minutes each month
is all it takes to understand
your fees.
Discover: How To Avoid Unnecessary Bank Charges.
4. They don’t forget to
adjust their finances after big changes in life.
Did you get married recently?
Is your spouse referenced in your will?
These are some of the points
that financially successful people manage effectively.
While you can automate a
great deal of your finances, it is vital to make adjustments
when your life and family
circumstances change significantly. Sitting down by yourself
(or with a financial expert)
at least once a year to review your life and financial plan
is an excellent way to stay
on top of important changes.
Learn: Arrange your
finances for the long term with estate
planning.
5. They are not satisfied
with a stagnant income; they look for ways to increase their income.
Some people never ask for
more money or simply settle for 1-3% increases.
Unfortunately, that rate of
income growth means you are simply standing still
–inflation is slowly eating
away at your purchasing power. Instead, successful people
look for ways to earn more
income. Increased income gives you more options
for personal enjoyment, more
capacity to give money, and a sense of security.
Successful people take daily
action to increase their income.
For example, they take a
course to improve their skills or they contribute ideas
to improve the productivity
of their companies. They also know how
to ask for more money.
Tip: Do yourself a favor and learn about
high paying fields:
earn $100,000 in project
management and discover the highest paid jobs in America.
6. They don’t ignore
financial statements.
Reaching financial success
requires some slow and steady habits.
That includes forming a habit to monitor your financial
statements.
Successful people set a time each month –30 to 60 minutes–to
review
all of their financial accounts: investments, bank accounts, credit cards and more.
When
they detect an error or omission, they take immediate action.
Tip: Set a recurring reminder in your
calendar each month to review your financial accounts.
7. They don’t take foolish
risks in money.
Warren Buffet is often quoted
as saying, “Rule number one is never lose money.”
All investments carry some
measure of risk (and therefore the potential to lose money).
That said, successful people
use two powerful tools to avoid losses.
They understand the value of
insurance to control risk (e.g. home, auto, and life insurance)
and the importance of asset allocation.
Remember: If it sounds too
good to be true (or if you don’t understand how it works),
slow down and start asking
plenty of questions.
8. They don’t pretend to
understand everything when it comes to money.
The world is a vast and
complex place–successful people know and deeply understand
this truth. When it
comes to money, there is a lot of information out there.
That’s why successful
people like Warren Buffet understand
their limits
and focus on their strengths.
Tip: Review your knowledge
of money and investments.
If you are just starting out, read one or two classic personal finance books.
Or read 9 Can’t-Miss Secrets Behind Warren
Buffett’s Wealth for more
insights
from one of the world’s most
successful investors.
9. They don’t transfer
responsibility to experts.
Successful people do seek out
the advice of experts, yet they never yield responsibility.
For example, it is reasonable
to seek advice from a tax accountant in planning your financial affairs.
However, successful people take the time to ask questions
and evaluate the person
providing advice to them.
Tip: When seeking advice from professionals
like accountants and lawyers, ask questions
and seek to have the advice
explained to you. Otherwise, it is difficult to act on the advice.
10. They don’t let the
pursuit of money overcome other values.
Seeking financial success is
a valid goal. Significant financial resources give you more options
to give to causes you believe
in. It also means improved access to technology, health care
and leisure. However,
successful people understand that financial success is only one aspect
of a successful life. For
example, neglecting health in the pursuit of money is a poor strategy.
Tip: Review your personal goals to see if
you have a balance between financial goals,
career goals, family goals and
other activities.
http://www.lifehack.org/articles/money/10-money-mistakes-successful-people-dont-make.html
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