10 Of The Most Common Money Mistakes That Keep Even Smart People From Achieving Wealth
Did you know that it is often the smartest people that make the worst money mistakes because of certain characteristics and traits they possess? Apparently, that’s an actual thing.
According to CreditLoan.com, “Most of our financial moves are governed by principles collectively known as ‘behavioral economics’ — the study of how psychology drives economic decision-making.”
What happens is that rather than put all those smarts to good use financially, people make money decisions based on emotion rather than rational thinking.
Thankfully, there are ways to put a stop to that. Here are the top 10 money pitfalls even “smart” people tend to make and how to put an end to them, from the finanacial experts over at CreditLoan.com.
1. You’re indecisive.
“To encourage action, research your next move carefully to gain a bit more direction and clarity, so you don’t end up too confused to take action. Then, give yourself a binary choice. Too many options can be confounding, so use a process of elimination to narrow your options down to two. The fewer options you have, the clearer the solution becomes and the easier it is to act.”
2. You don’t realize that every dollar spends the same.
“Money is money. A dollar set aside for retirement or education is not more sacred than a dollar from your savings account or travel fund. And don’t let where you store that money (whether in a savings account or an easily accessible wallet) change how quick you are to spend it. When you view each dollar as equal to every other, you’re less likely to spend money recklessly, and, conversely, you’re not too tight-fisted to a point that you miss out on big wins or opportunities.”
3. You diversify before you optimize.
“You don’t need to change your entire lifestyle in a day. Instead, come up with a tweak that will help you get closer to achieving a specific money goal or mastering a specific aspect of your finances, and incorporate it into your routine. So if you’re having trouble saving for your next vacation, experiment with tools like automatic withdrawal to make saving money toward your next travel destination super easy.”