Breaking Through Financial Wealth Barriers: 3 Traps to Avoid
Regardless of the income you may, money management is the key to a financially successful future. You’ll want to build your funds as carefully as possible, ensuring that you’re fully prepared for any catastrophic circumstances. We’re all just a debt away from monetary instability, after all, leaving your future a vulnerable mess.
Building your wealth, however, requires more than just intention. You’ll want to fortify your plans with action, and that means self-evaluation. What kind of behaviors do you currently possess, and which one of them is potentially destroying your financial journey?
Well, you may be dealing with several. Here are some of the most prevalent traps that prevent you from building your wealth:
Trap #1: Failing to make a budget
Planning has always been the prerequisite to success, no matter the goal. When it comes to your financial life, however, planning is a non-negotiable—anything less will cause you to fail tremendously. If you wish to take up investments, pay off debt, and at the same time build your wealth, you’ll need a blueprint. This comes in the form of a budget, which should keep expenses below your income.
A portion of it goes to your emergency fund, along with the house you wish to purchase in five years. The rest must go to your necessities and bills, while the portion left should be spent however you wish. The idea here is to prioritize and find what works best for you.
Trap #2: Engaging in too much (and expensive) socializing
Living in a highly urbanized city, you may be tempted to bar hop, dine in restaurants, and watch countless movies—all done after shopping. You will also be compelled to regularly go out with friends, for brunches, cafe dates, and other socialization activities. Unfortunately, these add up and eat away at your budget.
If you wish to build a sustainable wealth-building plan, you need to begin cutting back. Socializing is something that shouldn’t be taken away, but it can be done more economically. Having your friends over to cook dinner can be less expensive than dining out. Going for a walk at the park can also be a good substitute for brunch, as with an afternoon lost in the museum. Free activities exist all around—all you need to do is to seek.
Trap #3: Sales are always a justifiable reason to spend
Sales are the perfect opportunity to get those items you’ve been looking at for months, with the bonus of saving a little more due to price reductions. You get what you want at fewer costs, making it seem like a triumphant move. However, you may end up hurting your finances in the long run, especially if sales happen frequently.
More often than not, things you purchase on sale aren’t truly necessities. Those boots you got for $190 may seem like a deal, especially if they once retailed at $350. You will still have lost that $190, however, on an item you didn’t need. Sales are only useful when you have a real need for an item.
Reaching Financial Success
From everything said and gathered, now is the perfect time to conduct an evaluation. Think of the traps aforementioned, and try to see if you frequently engage in such behaviors. Whatever the problem area may be, however, you’ll want to avoid these traps at all costs. Wealth building is a process that entails discipline and commitment—only then will you see the results.
When it comes to managing your finances, blackwallet® is the perfect companion. We’re all about empowering urban millennials regarding their finances, particularly the black community in Miami and the rest of the country. Allow us to connect you with black financial advisors, or perhaps learn more through our personal finance blogs. We’ve got you covered—reach out today.