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By Audrey Korir

I know using the words “should” or “never” comes off as though I am taking an authoritative place in steering your financial decisions, but sometimes using the word “no” just does it when trying to address an issue.

If you are an employee, then one of your major incomes is your salary.  Your financial decisions will be influenced by what goes into your account at the end of every month.

Personal finance 101 dictates that you be smart about your money, you need to budget, save, spend on the necessary things and come up with a financial plan.

A financial plan gives you a visionary outlook to help you set short and long-term goals on how you will manage your finances.

Don’t you want a secure future?

Here are some 4 pitfalls to avoid;

1. Spending your entire salary

You know the phrase, “Living within your means”?

Living within your means is all about building wealth and having financial security.

When you are still earning a salary, saving and investing should be your priorities so that you can accumulate wealth. Your goal is to get enough to help you live comfortably in retirement and meet any unexpected needs.

Don’t spend your entire salary on upholding a certain lifestyle that you can’t afford.

2. Spending before paying debts

Whether it’s a business loan, student loan or soft loans from friends, debts are a huge part of our financial lives so settling them is crucial.

Don’t get into the habit of spending your salary before settling your debts, as this will strain your progress from attaining financial freedom.  To live a financially secure life, pay off your debts and maintain a good credit record for future financing.

QUICK READ >>> 4 Things Keeping You From Making Money

 3. Impulse buying

How many times have we walked into a store with an aim of only buying groceries but end up buying extra items like clothes or shoes?

If this is you, then you need to fight that urge of purchasing things that you had not planned for.

We often fall victim to impulse buying because we are trying to keep up with trends and maintaining our lifestyles.

Never spend your money on things you don’t need because, eventually, you will let them go and it will have cost you capital that you would have channeled towards profitable investments.

Set the right goals!

4. Investing in risky ventures

We are all on the lookout for great investment opportunities. It could be that piece of land you saw advertised in the newspaper, that dream house you saw on some street or even that fancy car you saw a friend driving.

However, you should apply caution before committing your hard-earned money to an investment that you don’t understand, or that sounds too good to be true.

Often, these investments could end up being an expensive mistake. Exercise caution or consult experts when investing to avoid making mistakes and to protect your income.

In the end,

Be smart with your money. Budget, prioritize and save as much as you can, it’s that simple!

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