10 decisions made today that can ruin you tomorrow

Just as there are very good financial decisions, there are also bad decisions that can easily lead to bankruptcy.

The aim of this article is to explain to you what are those bad decisions that not only affect your pocket today, but also jeopardize your financial future.

The thing is, we all make mistakes with our money. And while that’s understandable, we must strive to better manage our revenue. Remember that in many cases our current situation does not depend on the amount we earn, but on the way we use it.

So let’s look at the decisions that could lead you to bankruptcy and how you can not only avoid them, but change them into behaviors that lead to your financial freedom.

1. Don’t save

Saving money is nothing more than the money you set aside today to pay for your “future self”. Saving money shows that you have the ability to think beyond the present and reserve something for your future.

When you save for your future today; You have money to invest later, you can build wealth that works for you, and you have financial backing when times get tough.

Choosing to save part of your income is undoubtedly a behavior that will save you from future bankruptcy.

2. Spontaneous expenses

Have you ever felt the urge to buy something you don’t need and can’t resist? This is called instant gratification.

Unfortunately, if you are too impulsive to make financial decisions, you will most likely make mistakes that will cost you money.

Buying things you don’t need or crave and buying something right away, spending money on unwanted gifts, or wasting your money are decisions that can ruin you.

And you probably think there’s nothing wrong if you do it occasionally. The point is that it doesn’t take a lot of bad decisions to have financial problems if you don’t watch your financial behavior.

The invitation is for you to examine why you are making these emotional decisions with your money. Therein lies the importance of emotional intelligence; because on many occasions Your wrong decisions with money are the result of an emotional emptiness.

3. Relying on a single source of income

In the book, The millionaire next doorthe author explains that millionaires have on average 7 different sources of income.

Have you ever wondered how many fonts you have? Do you have anything besides your salary?

They will probably say that your good monthly salary is enough to cover your monthly and unforeseen expenses. However, if you rely on a single source of income, you are exposing yourself and taking a significant risk.

The more revenue streams you have, the better. You have more financial security, and that’s something that’s very clear to people who are learning how to become a millionaire.

So the invitation is clear: Start saving some of your income as you can use this surplus to build new sources of income.

Here are some ideas other than your salary to create new sources:

4. Not having an emergency fund

I just mentioned in the first point that you should save money, so you might be wondering if that’s not the same as a emergency fund.

It is very good to clarify this doubt in such a way that you do not make a decision that will lead you to bankruptcy or financial problems.

A savings is an amount of money thought about your financial future and focused on growing your wealth and wealth. In contrast to this an emergency fund, As the name suggests, it is destined to embrace unforeseen events.

The big difference is that the emergency fund must have liquidity, you must have it available at all times. For this reason, it should not be invested in assets or accounts that do not give you access to this capital at any time.

There are financial experts who suggest saving the equivalent of 6 months income as an emergency fund. If you can’t now, start putting a month or up to three months’ income aside.

You can keep it in a separate account that you don’t have access to for unnecessary spending, impulse purchases, or whims. This money, as the name suggests, is for every emergency in your life.

5. Bad choice of your partner

Napoleon Hillin his Best Seller Think and Grow Richexplained more than 80 years ago that choosing your partner is a crucial decision in building your wealth.

In the same order of ideas, a poor choice of your life partner can lead you to bankruptcy.

While it may seem a bit extreme, the reality is that in a marriage or relationship, the choices the other person makes affect your personal life.

And that goes for financial decisions; If your partner does not know how to manage money, if they have bad financial habits, spend money impulsively, get into debt and save, you will find it difficult to have good financial health at home.

It’s good to point out here that managing money isn’t a skill we’re born with, nor is it taught to us in school.

Therefore, we must have the patience, understanding and desire to learn how to manage money intelligently together.

6. Not investing in your financial literacy

As we just mentioned We need to invest money, resources and time to learn how to manage money. It’s as simple as that: if you don’t devote resources to training, you will continue to make the same bad decisions that can lead to bankruptcy.

And there’s no need to buy expensive courses or tutoring from experienced finance gurus. You can do this in the easiest and fastest way.

Here are some very cheap ideas to invest in your financial education (even for free):

• You can buy a personal finance book. For example, you can read the Rich Mind e-book.
• Follow those teaching financial tricks on your social networks
• Read financial blogs, money management. Read an article every day.
• Subscribe to YouTube channels for investing.
• Surround yourself with people who have similar financial goals as you.
• Invest in a virtual finance course.

7. When borrowing

In the Zero Debt eBook, we talk about how to get out of debt fast without requiring any additional income or great financial knowledge.

In this e-book we touch on an important point: Distinguish between good debt and bad debt.

Did you know that you can use your debt in your favor and even earn income from it? This is the power of good debt and its importance in using it to build wealth.

However, there are other types of debt; such as consumer loans, credit cards and overdrafts, that they only drain your pocket and, unfortunately, in some cases lead to bankruptcy.

As usual, Credit cards have the highest interest rates on the market. So if mismanaged, they can lead to real economic problems.

A Life of Debt:

There are people who have multiple credit cards, and all have active debt on top of a car loan, student loan, and other types of debt.

In these cases, it’s very likely that what you earn each month is meant to pay your debts, you can’t save, and you can’t lose your job. You live with very little margin, and any unforeseen event or emergency affects you much more.

If you’re currently at this point, you can identify all of your debt, try to combine it into one, or focus on paying off the most expensive one and look for new sources of income that can drastically reduce that level of debt.

Secondly, look for alternatives to avoid falling into this vicious circle of over-indebtedness. It’s important to understand what brought you to this point in order not to fall for it again.

8. Bad insurance

A well-chosen insurance policy takes some of the uncertainty out of your life. The point is that these often become unnecessary expenses because we already have similar coverage or we just don’t need it.

However, there are life, auto, health, home, and even business insurance policies that offer significant benefits and will protect you in the event of an unexpected situation, death, or accident.

For example, today there are many people who work online or independently. In these cases, your support will depend on your integrity, talent, or ability. So it would be a very good idea to have insurance to protect you in the event of an emergency or risk.

Personally, I am convinced that good insurance is an excellent tool to avoid bankruptcy due to an unexpected situation.

Recommended books:

9. Confusing investing with betting

No better way to say it Warren Buffett: The risk is that you don’t know what you’re doing.

This is the case for people investing in the stock market, investing in digital currencies, or doing business in industries that are completely unfamiliar to them.

They call it investing in new trends, when the reality is that this is nothing more than a financial bet.

Unfortunately, many people have gone bankrupt because of these financial bets, which are incorrectly referred to as investments. If you really want to invest, first take the time to educate yourself and understand how the industry works.

Don’t invest the money that cost you so much to get the following predictions from gurus. These will not answer for the results you get.

And I’m not saying don’t listen to advice and follow financial experts. Rather, it is an invitation for you to do your homework; that you educate yourself, read, train and understand very well before making any investment.

If you do, you’re taking a whole different risk. Well, you’re not going to bet all your money and jeopardize your financial future.

10. Live above your income

In conclusion, everything I just mentioned can be summed up as follows: The worst decision you can make today, and one that can ruin you tomorrow (or sooner), is to live beyond your means.

When you live to show off, when you lead an expensive lifestyle, get into debt, jeopardize your income and take an emotional stance, your finances are at great risk.

If your project is to achieve financial freedom, to have a peaceful financial future, the invitation is that you review those decisions and be very honest with yourself.

Change what you need to change and make financial decisions that contribute to your financial peace of mind and allow you to enjoy life.

Read Next: Why Your Salary Shouldn’t Be Your Only Source of Income