InvestorQ : I'm constantly out of money. What mistakes must I avoid?
Anjali Desai made post

I'm constantly out of money. What mistakes must I avoid?

Allysin Pinto answered.
2 years ago

The core of most financial problems is spending the moment the salary arrives. Buying a few important items a month should only be done only if after all the necessary expenses have been paid and a good amount of your money is deposited into savings. This is possible through budgeting. Your savings should be categorized into two types. One is emergency funds. Like the name suggests, this will help in case of emergencies. Other, is to invest. Invest in the stock market, mutual funds, post, etc. whichever fits best with your needs.While investing, diversify your investments. In case, one investment incurs loss, the profit of another investment will neutralize the loss.

All this might seem a lot, it might feel like you have no money remaining for personal use. Don't worry, this isn't the case. Spend the money you have, not the money you do not have. What this means is, don't take excessive amounts of loan you can not pay off. Once you fall in that trap, it is difficult to get out of it. You might spend all your money paying off loans. If you cannot pay off the loans, you will take more loans to pay the previous loans. It's a vicious cycle.