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NOW ONSo let us begin. The first big mistake is an easy one: overspending. Just spending more than you earn. This will always leave you trying to fill a leaky bucket. I know this sounds really simple, but don't spend like there's no tomorrow. Spend wisely. You know, I was making $100,000 a month and I was still spending more than I earned because I just kept increasing my lifestyle to keep up with my salary. And the reality is being frugal is the way to become rich. Maybe it means cooking at home, maybe it means not going out to the most expensive restaurant you can afford, maybe it doesn't mean putting all of your savings into that concert or trip. Just live as frugally as possible.
Now, while that's simplistic, the really getting closer to things is mistake number two: ignoring the money trail. And that goes back to just visibility. What you measure is what you manage. If you're not looking at your bank account every single day, then you're not going to know how much you're spending, you're not going to know how much you have saved. Don't be a money ghost, you should keep tabs on your money every single day. The more you watch your bank account, the more you will save, and the more you will be able to just be rich, eventually.
Now, the third money mistake is what I call goal-like, like having no goal and just kind of wandering in this world of money. If you do not have specific goals, it's going to be hard to know where you're heading. If you get in a taxi, an Uber, or a Lyft and you don't give the taxi driver a destination, you're not going to go anywhere. So the most important thing is to have a goal. Everybody's dream is as unique as how unique every person is. Write down your goal, put it in the comments right now. What is your monthly income goal? What is your yearly income goal? Whatever it is, what is your hourly goal? Whatever that is, write it down, get it down there, and create a plan to get there.
The fourth money mistake is credit card overload. Don't overuse credit cards. Use credit cards to build credit and financial history with this capitalist system, but for most purchases, you should be using a debit card or cash or something like that, because you don't want to become reliant on just being able to spend, spend, spend with a credit card. I did that right. I had an insane limit, hundreds of thousands of dollars. I'd say, “I want a new car today.” I'm sure you've seen me in Lamborghinis, you know, pictures of all these videos of me in my car. I just spend, right? I had a limit, I'd make it back. It's not a good look.
Oh my God, I've made all of these mistakes, guys. But here's another money mistake. This is mistake number five, is having no emergency cushion. And the reality is emergencies will come up depending on how your life is. Once every three months or once every month, seriously. How often do emergencies come up for you? I'd love to hear you posting in the comments an emergency meaning something that you have to do, a big outlay of cash for. Life is just full of surprises, you know? Whether it's a medical issue, you get sick and you have to pay for some expensive doctor or whether it's your car got rear-ended and you have to pay for some insane amount of money. Just last week I had to pay an extra $144,000 for some damage that was done to my car that basically I caused. But that's an example of if you don't have an emergency cushion, you won't be able to afford these emergencies in life, and they happen all the time. Let me know in the comments how often they happen in your life.
Q: How can I avoid overspending?
A: To avoid overspending, it is important to spend wisely and live frugally. Avoid increasing your lifestyle to keep up with your salary and consider cutting back on expenses such as dining out and luxury purchases.
Q: Why is it important to monitor my money trail?
A: Monitoring your money trail is essential for financial management. It allows you to track your spending habits, know how much you have saved, and make informed decisions about your finances. Ignoring the money trail can lead to financial instability.
Q: How can I set financial goals?
A: Setting financial goals is crucial for effective money management. Define specific goals for your monthly income, yearly income, and hourly income. Having clear goals helps you stay focused and create a plan to achieve financial success.
Q: How can I avoid credit card overload?
A: To avoid credit card overload, use credit cards strategically to build credit and financial history. For most purchases, consider using a debit card or cash to prevent overspending. Overusing credit cards can lead to financial troubles and dependency on credit.
Q: Why is having an emergency cushion important?
A: Having an emergency cushion is crucial for handling unexpected expenses that may arise in life. Emergencies such as medical issues or car repairs can require a significant amount of money. By having an emergency fund, you can protect yourself from financial hardships during unforeseen circumstances.