Finance plays an important role in our lives in different areas and sectors of our economic, social and political sector. The three main purposes finance covers are liquidity provision, credit provision and to manage risks. When finance is mismanaged or made unavailable, one or all three of the purposes cannot be fulfilled. In as much as finance is needed in every area and stage of our lives, at one point in time or another, many have faced different financial challenges.
The challenges faced may be due limited financial resources, mismanagement of existing financial resources, loss of finance due to fraudulent activities or basically anything that will make you lose money. Regardless of whatever names these challenges come packaged in, there are peculiar mistakes people make at different points in their lives that starts a domino effect in causing these problems. In this post, some of the mistakes we make in our 20s, 30s and 40s will be briefly touched on. Here goes:
- 20s: We tend to live beyond our means with no regards for tomorrow. The thrill of getting your first salary or having a steady source of income gets into your head and you tend to spend on wants instead of focusing on your needs and investments. Second mistake made is not saving for retirement. You’re thinking, “what is this one saying?” and rolling your eyes. It’s better you start saving now when you’re going and can out in much work to get results so that your older self will thank you for it.
- 30s: You’re in your 30s and you’re thinking of owning a house of your own, probably saving up to it already. At this point in time, it’s advisable to not take a huge chunk out of your income or savings to fund for a house above your means as you still need to take care of the house bought. Secondly, due to the mistakes made in your 20s, you’re probably busy trying to fix then instead of protecting yourself financially. So take out time and hi through those insurance plans while saving up and investing wisely for days ahead.
- 40s: You have college funds and kid’s needs to take care of right now. Sitting down and discussing college fund options will be a good idea. Also, saving for your kids college funds takes a major chunk of your finances but setting aside little by little for this won’t hurt in the long run. Secondly, no one likes a Will. Well, apart from the fact that it reminds you of the other place, most people think it irrelevant to have a will at this age. However, think of your loved ones and how much allocating your finances will help if anything happens to you.
Having these in mind, how about you review your financial plan and process and make corrections? Oh, also have a lovely day.