{"id":4107,"date":"2022-01-02T14:53:35","date_gmt":"2022-01-02T14:53:35","guid":{"rendered":"https:\/\/blog.ethis.co\/?p=4107"},"modified":"2022-11-14T07:26:41","modified_gmt":"2022-11-14T07:26:41","slug":"5-money-mistakes-to-avoid","status":"publish","type":"post","link":"https:\/\/ethis.co\/blog\/5-money-mistakes-to-avoid\/","title":{"rendered":"5 Common Money Mistakes and How to Avoid Them"},"content":{"rendered":"\n<p>As humans, we are not devoid of making mistakes. This includes making the wrong move when it comes to our personal finances. There\u2019s nothing wrong if you have a few financial regrets as long as you don\u2019t keep making the same mistakes over and over again. While money mistakes are arguably subjective, some money mistakes are common. Here are five common money mistakes and steps you can take to steer away from them.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_51_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\" role=\"button\"><label for=\"item-69e365a78b3b4\" ><span class=\"\"><span style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input aria-label=\"Toggle\" aria-label=\"item-69e365a78b3b4\"  type=\"checkbox\" id=\"item-69e365a78b3b4\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/ethis.co\/blog\/5-money-mistakes-to-avoid\/#1_Not_defining_wants_vs_needs\" title=\"1) Not defining wants vs needs\">1) Not defining wants vs needs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/ethis.co\/blog\/5-money-mistakes-to-avoid\/#2_Spending_more_than_you_earn\" title=\"2) Spending more than you earn\">2) Spending more than you earn<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/ethis.co\/blog\/5-money-mistakes-to-avoid\/#3_Not_budgeting_your_expenses\" title=\"3) Not budgeting your expenses\">3) Not budgeting your expenses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/ethis.co\/blog\/5-money-mistakes-to-avoid\/#4_Getting_into_unnecessary_debt_is_one_of_the_common_money_mistakes\" title=\"4) Getting into unnecessary debt is one of the common money mistakes\">4) Getting into unnecessary debt is one of the common money mistakes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/ethis.co\/blog\/5-money-mistakes-to-avoid\/#5_Not_investing_earlier\" title=\"5) Not investing earlier\">5) Not investing earlier<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"1_Not_defining_wants_vs_needs\"><\/span>1) <strong>Not defining wants vs needs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Not defining wants versus needs can put your financial health at peril, especially when you do have a clear idea of where your money is going and how it is spent.<\/p>\n\n\n\n<p>Needs are generally your basic living expenses, things necessary for your health, or expenses that are required for you to do your job, raise your children, and support your family. Wants are things you choose to buy to improve your life and live more comfortably but are not a necessity.&nbsp;<\/p>\n\n\n\n<p>Though human basic needs are more or less the same, one\u2019s needs vs wants vary from person to person depending on their health conditions and other factors. A car, for instance, is a need for most people but a luxurious car, no matter how rich a person is, will always be a want. A family car, on the other hand, could be a need for a big family but is a want for a small family.<\/p>\n\n\n\n<p>When your budget screams for a little trimming, cutting out \u201cwant\u201d purchases is the best way to manage your spending. Knowing the difference between wants and needs and identifying which is which in your budget is key in preventing you from spending beyond your means.<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"2_Spending_more_than_you_earn\"><\/span>2) Spending more than you earn<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>According to Finance Minister of Malaysia, Tengku Datuk Seri Zafrul Abdul Aziz in a statement earlier this year, 40% of Malaysian millennials are spending beyond their means. It\u2019s based on the finding by Bank Negara Malaysia that says <a href=\"https:\/\/www.thestar.com.my\/business\/business-news\/2021\/03\/10\/most-millennials-spend-beyond-their-means\" target=\"_blank\" rel=\"noreferrer noopener\">47% of Malaysian<\/a> youths have high credit card debts.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"536\" src=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/421-1024x536.png\" alt=\"money mistakes\" class=\"wp-image-4108\" srcset=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/421-1024x536.png 1024w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/421-300x157.png 300w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/421-768x402.png 768w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/421.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption><em><strong>Spending within your means puts you in a better financial position.<\/strong><\/em><\/figcaption><\/figure>\n\n\n\n<p>Identifying which one is your wants vs your needs is crucial in ensuring that you do not spend more than you earn. Beware of the pitfall of keeping up with the Jones and impressing people that leads to excessive spending. If you have fallen prey to overspending, start correcting it by acknowledging that you need to cut down on spending.&nbsp;<\/p>\n\n\n\n<p>Cut back on \u2018wants\u2019 aka nonessential expenses such as dining out, shopping, other entertainment and stay away from impulse purchases. Once you are back on track, make it a practice to live within your means and only buy things you can afford with the money you already have.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"3_Not_budgeting_your_expenses\"><\/span>3) Not budgeting your expenses<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>When you do not have a budget, you do not have control of your finances. Budgeting is crucial in ensuring your monthly spending does not exceed your disposable income. Without a budget, you can make a decent income yet still struggle to get by.<\/p>\n\n\n\n<p>Everything is clearer when you set a budget. By budgeting your monthly expenses, you can clearly track where your money is going and what you can afford to spend on. It imposes spending limits on yourself so you don\u2019t spend beyond your means. This helps you from falling into unnecessary debts. These days, it\u2019s easy to overuse and abuse credit cards. Before you realise it, you are overspending until you are drowning in debt.<\/p>\n\n\n\n<p>Having a budget and sticking to it prevents you from this precarious situation. It puts you in charge of your finances. You&#8217;ll know exactly how much money you earn, how much you can afford to spend each month, and how much you need to save and prepare yourself for emergencies.<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"4_Getting_into_unnecessary_debt_is_one_of_the_common_money_mistakes\"><\/span>4) Getting into unnecessary debt is one of the common money mistakes<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Some debts are necessary to take and are the only way for most people to afford to purchase basic necessities in life. House mortgage and car loans, for example, are two of the most basic debts that are hard to escape in this modern world.&nbsp;<\/p>\n\n\n\n<p><strong>Related: <\/strong><a href=\"https:\/\/ethis.co\/blog\/5-rules-avoid-unnecessary-debt\/\"><strong>5 Rules to Avoid Getting into Unnecessary Debt<\/strong><\/a><\/p>\n\n\n\n<p>Knowing when it\u2019s necessary to take a loan and when it\u2019s not is important. Taking a loan for your dream wedding or a holiday trip are some examples of unnecessary debts. Any type of debt can take a toll on the borrower\u2019s life, never mind an unnecessary one. It puts unnecessary pressure on the household&#8217;s finances and creates a lack of financial security for yourself and your loved ones.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"536\" src=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/431-1024x536.png\" alt=\"money mistakes\" class=\"wp-image-4109\" srcset=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/431-1024x536.png 1024w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/431-300x157.png 300w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/431-768x402.png 768w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/431.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption><em><strong>Staying out of unnecessary debt is a good money management habit.&nbsp;<\/strong><\/em><\/figcaption><\/figure>\n\n\n\n<p>Many forms of debt can accrue late payment charges, interest fees and eventually be sent to collection agencies if not taken care of promptly. It is important to make a plan to clear your debt as soon as you can.<\/p>\n\n\n\n<p>The best way to practice good money management is to stay out of unnecessary debt altogether. When you live within your means and budget your expenses, you are less likely to get into unnecessary debt.<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"5_Not_investing_earlier\"><\/span>5) Not investing earlier<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It takes time for your money to grow. The earlier you start investing, the greater the accumulated return on your investment and the more money you make. When you start earlier, you will also have more room and opportunities to make investing mistakes and learn from them.<\/p>\n\n\n\n<p>There is a massive difference between starting your investment portfolio at 20 versus at 30. The later you start, the fewer chances you get to earn passive income and grow your investments. Nonetheless, as the saying goes, it\u2019s always better late than never at all.&nbsp;<\/p>\n\n\n\n<p>In this modern age, investing is now at the tip of your fingers thanks to the advent of technology which makes accessibility to different instruments easier. All you have to do is to research and do your due diligence to find the ones that suit your finances and financial goals the most. No one size fits all so determine your risk profile, level of commitment and align it with your goals.&nbsp;<\/p>\n\n\n\n<p><strong>Related: <\/strong><a href=\"https:\/\/ethis.co\/blog\/5-factors-invest-short-long-term-investments\/\"><strong>5 Factors to Help you Better Invest in Short- and Long-Term Investments<\/strong><\/a><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"536\" src=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/451-1024x536.png\" alt=\"money mistakes\" class=\"wp-image-4110\" srcset=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/451-1024x536.png 1024w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/451-300x157.png 300w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/451-768x402.png 768w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/451.png 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption><em><strong>Avoid these money mistakes.&nbsp;<\/strong><\/em><\/figcaption><\/figure>\n\n\n\n<p>When it comes to investing, don\u2019t put all your eggs in one basket. Diversify your investment with Ethis, the world\u2019s best Islamic crowdfunding platform that offers equity crowdfunding and peer-to-peer lending investment options.&nbsp;<\/p>\n\n\n\n<p>Learn more at <a href=\"https:\/\/ethis.co\/blog\" target=\"_blank\" rel=\"noopener\" title=\"\">ethis.co!<\/a><\/p>\n<div class=\"rns\" data-title=\"5 Common Money Mistakes and How to Avoid Them\" data-tags=\"\" data-categories=\"Personal Finance\" data-comments=\"0\" data-date=\"1641135215000\" data-author=\"Triningsih Ngadimun\" data-single=\"\" data-url=\"https:\/\/ethis.co\/blog\/5-money-mistakes-to-avoid\/\"><\/div> <!-- Check out https:\/\/reactandshare.com -->","protected":false},"excerpt":{"rendered":"<p>As humans, we are not devoid of making mistakes. This includes making the wrong move when it comes to our personal finances. There\u2019s nothing wrong &hellip; <span class=\"read-more-link\"><a class=\"read-more\" href=\"https:\/\/ethis.co\/blog\/5-money-mistakes-to-avoid\/\">Read More &rsaquo;<\/a><\/span><\/p>\n","protected":false},"author":65,"featured_media":4111,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":""},"categories":[2026],"tags":[],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2022\/01\/Blog-page-images-31.png","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbDwgm-14f","_links":{"self":[{"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/posts\/4107"}],"collection":[{"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/users\/65"}],"replies":[{"embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/comments?post=4107"}],"version-history":[{"count":3,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/posts\/4107\/revisions"}],"predecessor-version":[{"id":6503,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/posts\/4107\/revisions\/6503"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/media\/4111"}],"wp:attachment":[{"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/media?parent=4107"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/categories?post=4107"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/tags?post=4107"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}