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There’s a lot of mystery around what makes a good financial decision. And in any case, there are no absolute correct answers when it comes to money! But here’s the thing: most people’s financial health isn’t dictated by making good decisions. It’s made by making – or avoiding – the bad decisions. So what are some of the reasons that cause people to fall into financial disarray? We take a look below. If you think you might be guilty of some of these decisions, then it might be time to take a step back and reevaluate your approach.

1. They’re Poorly Organized

As much we some of us would like to think. Otherwise, money isn’t going to take care of itself. For a person to be financially healthy, they need to have a clear understanding of their incomings and outgoings, And while this might seem like a difficult task, all it really comes down to is organisation! Spending an hour or two each week doing all those niggling financial admin tasks will help you have greater control of your money, and more importantly, alert you to those financial red flags before they become big problems.

2. They Have Too Many Options

It’s hard to know where to begin when it comes to handling your money. There are simply too many options out there! And here’s the thing: humans actually aren’t all that great at making decisions. The more options they have, the less clearly they think; there have been some interesting studies done on this subject, and it doesn’t make humans look all that great! As such, the best advice seems to take a look at the financial targets that are manageable and achievable, and focus on them. If your mind becomes too cluttered with options, you’ll be more likely to make a mistake.

3. They Don’t Have the Right Knowledge

Unless you work in a job that deals with the financial world, or you’re a genius at maths, then the chances are, you’re bluffing your way through some segments of your financial life. You simply can’t have all the knowledge that you need to make the best decisions. But even if you don’t have the knowledge, you can still gain access to more expert opinions. There are courses, books, and blogs that can run you through the basics, and for everything too complicated you can refer to a financial advisor. Remember, when it comes to money, knowledge is power – whether that knowledge is yours or somebody else’s is immaterial.

4. They Think Short-Term

Humans are hardwired to look at the here and now. But they also have a pretty amazing gift at their disposal: they can project their mind to the future! Alas, some people fail to do this, and as such don’t fully understand how much cash they’re going to need someday way down the line. If you’re underestimating how much you’ll need in retirement, for example, then it’s time to review your financial plan and come up with something that’ll ensure long-term financial health.

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