Struggling financially? Many people are, even though they all give the impression that they have achieved everything. They work, live in a nice house, and drive a nice car, but they live from payday to payday. In this article, we have carefully outlined the possible causes of financial failures that you might need to avoid on your financial journey.
Causes Of Financial Failures
1. Living beyond your means
There is no way around it. If you spend more money than you earn, you have to get your extra money somewhere, and that almost always means borrowed money. All this has a price and it’s called interest. If you have a habit of buying things on credit, the interest you pay during your lifetime will make a fortune. Interest is sometimes called dead money because you have nothing to see for all the interest you pay.
Think about what you could have spent with all this interest. It’s almost too painful to even think about it, but if you want to avoid poverty, stick your head out of the sand and face the facts; your financial future depends on it.
2. Bending To Peer Pressure
Some people try to keep up with their peers on whatever their money is spent on. It’s a compulsion that costs you a lot. Living up to a kind of self-image has serious consequences for your finances and will be very costly if you ever stop working. You may think that your peers are financially well off paying for these things, or even think that they have done well for themselves, but what you do not know may surprise you. Even if they live within their means to finance their lifestyle, that does not mean you have to keep up with them.
Never try to live up to the expectations of others, always live your life and not the one people want you to, then you will be much happier.
3. Consumer debt
Consumer debt or stupid debt, as it is often called, buys things with borrowed money. Use tomorrow’s income today. Debtors are usually unaware of what is happening with the so-called things they have bought on credit; that their newly acquired assets were worthless when they bought them. A crucial factor to consider is this; The money owed on the item is always greater than the value of the item. Not many people are involved in the cycle of debt and poverty, and it is not just people with low incomes; in fact, middle-income people are prone to this trap.
4. Commercial Greed
Commercialism brought much prosperity in the 20th century; It has created jobs and created countless companies, but there is another aspect. First world poverty is caused by an insatiable hunger for things. People are not satisfied with what they need, they still want more. All of this has to be paid for, it is money that could have been used to lay the financial foundation for your future.
Addictions are very expensive; ask all smokers. You don’t have to be a mathematician to find out how much smokers pay for addictions. No wonder many smokers are broke. The same goes for alcohol and vending addicts.
6. Financial illiteracy
Financial illiteracy is a major cause of financial poverty and it is not only those with financial illiteracy that have low incomes; People with a high income can also be blamed for this. Hear stories of successful athletes who made millions in their heyday but failed years after retirement. It is important to save and invest money during the best years of your earnings to prepare for a time when you won’t be making that much anymore.
Taking no responsibility for your finances is irresponsible. They will make up all sorts of excuses not to join the Monthly contributions committee in their offices or Church. People who are irresponsible with their finances are generally irresponsible in other areas of their lives as well. Taking on responsibilities, whether it’s in a relationship, owning a house or a car, or saving for retirement, takes responsibility and that’s what really separates men from boys.
8. Bad company
Poor circle is undoubtedly one of the main reasons why so many people live in poverty. It is said, “You are the average of the five people you spend most of your time with,” so it’s worth examining the kind of people you hang out with to know if their thoughts and opinions on finance apply to yours’. To grow you need the right company to help and encourage you. It sometimes means saying goodbye to bad company. For some it is difficult, but it pays off in the long run.
This is never an exhaustive list, there are so many causes of financial failures but this are some of the most common and familiar ones, kindly leave your thoughts in the comment section.