Understanding And Avoiding Costly Money Mistakes

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It is crucial to know how to handle money.
The first thing I will discuss is the 'danger of spending money you have yet to receive.
Never spend money that you haven't received. A commitment to pay someone cash because of a promise you received from someone else is a problem. This incident happened two years ago, and I was a victim.

I have been a victim of this incident two years ago. My sister promised me $800; she's a trusted person.
Anytime she makes a promise, she always delivers.
I intended to add the funds to the savings I had already made to purchase a concrete mixer machine.
The construction firm uses this machine, and my goal was to rent it out every day to the artisans so that I could make some profits.

I went to the vendor, deposited the money with me, and fortunately, the vendor sold the machine for me since we were working around his office.
I promised to pay him the entire payment as soon as possible.
I started using the machine on-site daily, waiting patiently until two weeks later when my sister promised to send the money. But unfortunately, something showed up, and she couldn't send the money anymore.

Then I was now a debtor, I pleaded with the vendor to repay the money monthly, and he agreed.
I spent more money each month than my earnings. My financial situation was affected, and I could not save for a while.

Another big mistake is expected business money

You might have done a task or business with someone, expecting your money.
Never make purchases on credit using the money you anticipate receiving. It is dangerous; if the expected cash doesn't come, you will have serious problems.

Most financial problems begin when one over spends money; always know this and consider it as a fact each time you spend your earnings to a negative balance, you must have an alternative way to bring your balance to a positive; if you fail to that, it means that you will always have your life in negative. No wonder it will be difficult to pay rent, buy food, to buy clothes; it will become challenging to do anything because your balance is negative.

What's The Solution?

If you ever discover that your money balance is negative. The solution is straightforward but demands discipline, honesty, and commitment.
The first step is to cut your expenditure; it might be on food or your lifestyle; you might stop buying new clothes or shoes. Adjust the negative balance to be moving closer to the positive balance monthly.

The next is to sell some of your luxuries that might give you enough cash to pay off debt. Some count this as a big deal.
Why will you keep using an expensive wristwatch when you are in massive debt? Sell it off and pay your debt; when you are financially balanced, you can purchase another wristwatch later.

A lot of people need to start using this straightforward strategy.
Many people in debt may hold onto expensive shoes and refuse to sell them.
Even though they have valuables to pay off the debt, they need help to stay out of debt.

Don't let the opinions of others stop you from going through this process. If you purchased those items in the past, you could still replace them, perhaps with better ones this time, after getting your finances back in the future.

In conclusion, the only way to solve our problems is by financial discipline, which might be difficult. Never spend money you haven't received.