Content disclaimer: the views and opinions expressed in this article are my own personal views and opinions. See my Disclaimer here.

I often notice people of all ages who are just terrible at making financial decisions. Maybe you know some of them too. What if you’re one of them? Let’s find out whether you’re moving in the right direction to achieve financial freedom and start living your dream life!

When I say “terrible at making financial decisions” I mean those people who have debts, however, instead of paying them back, they use their credit card to buy a Sony PlayStation or a new iPhone or something similar. Don’t get me wrong, I’m not one of those people who save on every little thing like paper towels which probably makes their life harder but they are okay with it as long as it saves them $10 a year. No, I’m definitely not one of those people who want to become a millionaire for the sake of being a millionaire. I value comfort and safety a lot and I strive to make my life easier and my household routine less time-consuming to spare time for more important things. So, I’d rather make $10 more than have the need to cut down on that stuff.

If I become a millionaire, I will certainly enjoy all the perks of it because I don’t want to be the richest person in the graveyard. However, I still won’t buy a game console…Why? Such devices consume TIME – one of the most valuable assets – that could be spent on more important things (like self-development or volunteering) or things that could secure your future; also, the money spent on such a toy could be spent on charity or investment and granting your financial independence.

What is financial freedom?

I understand financial freedom as having the luxury of time and choice not at the expense of sacrificing life quality. Financial freedom is not about being unemployed and living in a box. Financial freedom means that you have enough passive income or savings to satisfy your own needs and needs of your family also being able to maintain good quality of life. Incomes of people who’re financially free don’t depend solely on an employer. However, a person free financially can be employed if they want, because financially free people have also have the luxury of choice – they don’t work to make their ends meet, so they can work at a job they enjoy.

Common financial mistakes that don’t let people achieve financial freedom

Curious how many of these you make?

Not breaking down financial barriers in their mind

This is where it all starts. We all come from different backgrounds that leave an imprint. Someone had a poor childhood, someone was told that all rich people are bad, someone was told that it’s impossible to become wealthy, we’re all prepared for a 9 to 5 job, building a career and so on. Such ideas start to influence us even though we may not notice. But the truth is that those ideas have nothing to do with you. They existed in the minds of other people. Those people believed in them, so they did nothing to change that plan in their mind, and that’s what they got.

You always get what you believe in. Aim for the stars and you’ll reach the sky! Question all financial beliefs that exist in your mind. Where did you get them from? Are they true? Do you want them to apply to you? If you find out that your beliefs are not true (for example, like the belief that all rich people are bad), if you find out that your beliefs are just limiting beliefs and you’re not satisfied with where you are in life – fight your limiting beliefs and break down those financial barriers that exist in your mind. Believe in the opposite, do the opposite to what you’ve been doing and you’ll get different results.

Working at a wrong job

Working at a job that you hate, thinking that it’ll get better or that everyone hates their job too is a terrible thing to do! Not all people hate their jobs. The fact that you hate your job means that this job doesn’t suit you, it’s not your calling. Don’t waste your life on working at a job that causes stress. It’s difficult to retain motivation and get impressive results at a job that squeezes the life out of you.

Thinking that a regular job will make them rich

Just working at a regular 9 to 5 job can’t make you rich. Employees who earn much more than you (like CEOs) also work more than you, so even though they can buy more expensive things, they don’t have the luxury of time which may be worsening their life quality. Moreover, even CEOs’ salaries have limits.

Research how much TOP professionals at your position earn throughout the country. This way you’ll find out the maximum you can ever earn at this position. Are you satisfied with this amount? In most cases a good job will let you lead a moderate lifestyle but it can’t make you really rich, so you’d better start thinking about your future. Where do you want to be in 5 years? In 10 years? What do you need to do to achieve this? What are your strengths now? What are your weaknesses? What skills do you need to develop?

Hanging out with complainers

Do you know people who only whine and complain about their life? Yet it seems that they don’t do anything to change it…Well, that’s because they don’t want it. They like complaining and being a victim. They want you to feel sorry for them or give them money because life is so unfair to them! Here is my related article Stop Complaining: Our Life Now Is the Result of Our Past Choices.

Complaining is contagious and if you don’t want to “catch” that mindset, distance from that person! You can’t help that person and drag them out unless they want it. And if they want it, they’ll do everything for it by themselves. But they don’t want it. Accept the truth and stop wasting your time on saving them, persuading them, explaining stuff to them, mentoring them. Save yourself! Focus on your own life, dedicate your time and energy to achieving success, be persistent!

Having debts

Having debts changes your mindset just like hanging out with complainers. If you are a responsible person, you can’t forget about your debts, so these thoughts will always hover above you and create pressure. You’ll start living with a feeling that you always lack money. You’ll probably start saving on every little thing or you’ll start feeling guilty for every purchase. With time, you’ll find out that you have a mindset of a poor person. Everything will be too expensive for you, you’ll stop seeing opportunities for improving your financial situation, you’ll become depressed, unsatisfied with your life, maybe even envious towards people who have more financial freedom. So, it’s better to pay off your debts as soon as possible and then start working on your financial freedom.

Not knowing their true desires

Unfortunately, most people don’t know themselves. They lack time and energy to find out their true desires. Some of them haven’t even thought about it – that is how used people are to living in accordance with expectations of society. What do I mean by expectations of society? Well, these are sets of beliefs, morals, values common in the country you grew up in as well as among people you were or are surrounded by. Even if you don’t communicate with people much, there’s still social media that influences people a lot.

Don’t believe the hype! Think what is best for you. Ask yourself what you want, what your priorities in life are. Thinking that “one day I might start a business” will not work. You should have a plan in your mind. What does your dream life look like? What will your days look like when you achieve what you want? How can you achieve your dream life?

Make a plan for 5 and for 10 years. Write down the steps you’ll need to take. If you don’t know what you want or how to achieve it – you’ll never live your dream life. As soon as you have the clear picture – start acting. There will be no better time. Waiting for a better timing you are just killing time!

Inability to refuse instant rewards

If you can’t postpone fun and can’t refuse to get something right now instead of waiting and gaining much more than that, you’ll never be truly successful. Because success is about patience and persistence. There is no “become rich quick.” You have to be ready for a long journey. Maybe you’ll achieve success much faster but maybe it’ll take extra time.

Not knowing how much they spend

Does it matter if I spend extra $10 a day? I make much more a day! But $10 a day makes more than $3600 a year. Saving $10 every day, you can invest that money a year after or start a business, finally quit your 9 to 5 job, and start living your dream life much sooner than you imagined.

Calculate your monthly budget. What do you need to pay for this month and how much? Then save as much as it’s comfortable for you to save as soon as you get paid. It can be 10%, 5%, even 1% or 70% if you make a lot. Put that money aside and live on the rest. Sometimes you’ll have to refuse small things like a burger or a cup of coffee-to-go in order not to exceed your monthly budget but it’s worth it! This way you develop self-discipline.

Spending too much on items that will go down in price

I don’t like buying clothes, phones and other electronics that don’t contribute to my good health (when it comes to health, I spend as much as needed) or safety because these are some of the items that I can do without and that will certainly go down in price once I buy them. No one is going to return money for a sweater or a pair of jeans after one year. This money is wasted unless it’s one of a few sweaters or jeans that you have. If you need to buy new clothes because your old ones are in a poor condition – then it’s okay to buy new ones. But if you have 10+ sweaters and keep buying new ones, why? Does anyone really care what you’re wearing? Clothes are just a way to boost our confidence and show off. “We buy things we don’t need with money we don’t have to impress people we don’t like”. Self-esteem of a confident person can’t be shattered because of other people’s opinions. If you lack confidence, read How to Be More Confident and Succeed in Life and What’s the Difference Between Confident People and Unconfident People?

As for electronics, all this madness really has to stop. How many functions in your phone or TV do you really use? People have to understand what marketing does to them. Of course, they will be offered all these LCD, OLED, QLED, whatever types of TVs but as for me, I see no difference! I don’t care what type my TV is. Don’t even get me started on phones…

People must wake up and understand that expensive phones, watches, TVs, etc. don’t make them any cooler unless they are school kids.

Spending too much on entertainment

Sometimes I see people spending so much money on entertainment that the only question I have: are they that boring? Yes, boring, not bored. Because if you are a dull person, you’ll need a lot of activities to entertain yourself. But do you know what makes people less boring? Reading books and learning new stuff. By the way, it also helps with gaining more knowledge and developing new skills needed to succeed in life and actually add value to this world instead of living a mediocre life.

Buying things for the future

It’s that case when you buy a piece of clothing that doesn’t fit you or decorations for your own apartment which you don’t have. By the time you can finally use these items, your taste will have changed several times which equals waste of money.

Buying things they don’t like or don’t need at a discount

It often happens to my mom. She can buy tons of useless stuff just because it was so cheap (or much cheaper than before). Sometimes she also buys stuff for me because it was a bargain! But the thing is that I don’t want or need that stuff, so it ends up piling up in her apartment, then we give it away.

Whenever you see a discount, even if it’s huge, ask yourself whether you really need that thing, where and when you can use it, whether you’re fully satisfied with its quality and appearance. If there’s at least one drawback, take your time to think about advantages and disadvantages of this purchase.

Sacrificing quality for the price

If you are ready to sacrifice quality for the price, you need to work on your mindset. Chances are, you have a mindset of the poor. Buying super cheap items, you’ll probably need to replace them very soon.

Thinking they have enough time ahead to start saving

I’ve seen some 30-year old people who have nothing but debts. They spend everything they earn on food, eating out, devices, clothes, perfumes, etc. They don’t even bother to pay off the debts and one day such a lifestyle will become a habit unless they stop and think about it. It seems to them that they are young, so they have enough time to change their life but even if they start saving at 40, another person in their 40s, who has been saving and investing for 20 years, will be much ahead. Maybe this person will even have enough money to retire at 40 and do whatever they want with their time and money (financial freedom).

Moreover, when you’re 40, not only you will have less time, but also you’ll have less energy. And if you start a business at 40, and it doesn’t work out, it’ll be harder for you to recover financially than at 30. Do as much as you can while you’re young. Sacrifice insignificant things such as partying and buying “cool” stuff for your much greater future. Just an example, what would you choose, an Apple watch now or a brand new Mercedes in the future?

You may think that the cost of an Apple watch is insignificant compared to that of a Mercedes but it’s not about the money, it’s about priorities in life. You can choose a “cool” and careless lifestyle now but mediocre life in general, or rational lifestyle now and financial freedom – the luxury of time and choice in the future.

Saving only what is left

If you save what is left at the end of a month, there may be nothing left to save. When you get paid, calculate your future expenses for the month. Rent, utilities, mortgage, food, etc. Decide on the amount of money you can easily put aside and don’t count on this money unless there is an emergency. Save as much as it’s comfortable for you.

Maybe you’ll need to analyze your spending behavior and refuse buying some stuff that doesn’t contribute to your future. Do you want to be healthy, happy, wealthy, financially independent and safe, enjoy freedom in ten years or do you want to be at the same place you are now in ten years? If you want to progress, you need to take action.

Saving on comfort, health, and security for the sake of saving

The purpose of money is to be exchanged for goods and services, to provide security, comfort, help maintain good health. Let’s imagine that you need to save for something huge. You might start thinking that if you cut down your expenses here and there, it’ll help save, for example $50 per month. Then you might start thinking that if you move to a smaller or more modest apartment, you’ll save $150 per month. If you stop buying takeaway food, you can save another $100 a month. So, if you shrink to an uncomfortably small size (it’s a metaphor), you’ll save $300. But as soon as you start thinking that way, your financial mindset starts shrinking. You are no longer looking for opportunities. To become wealthy, you have to expand, not shrink! It’s impossible to become rich if your only way of having more money at your disposal is saving on your needs. One day there will be nothing left to cut down on.

Don’t agree to worsen your living conditions for the sake of saving money to become rich. It doesn’t work that way! Work with what you have now. Strive to improve your living conditions, not worsen them!

My parents have always looked at life that way. They’ve never tried to improve their (and my) living conditions. They believed that to buy something, you need to cut down on something else. They have never looked for opportunities to make more money with just as much or even less effort. They’ve always had extremely small salaries even though everyone was getting more. They just didn’t want to believe that to make money you don’t have to work 24/7. As a result, they’ve never had enough money to provide good quality of life and they’ve never been prepared for sudden purchases (like buying a new fridge instead of the broken one). My parents are the greatest example of how not to live for me. Their way of life is my nightmare. However, I often see people of my age who have a similar mindset which is super sad.

I guess this point where I say “don’t shrink, expand!” may be confusing to you after those passages where I said that I’ll never buy a game console or an overpriced phone. So, for me, being rich is about financial independence, financial freedom, comfort, security, safety, good health (read this article to find out what you can do to maintain good health), opportunity to add value to the world (via charity), while some modern devices people often spend on are overpriced, of little value for me, and they also kill time that could be spent on important things.

Pursuing unrealistic business ideas

First of all, there is no “get rich fast” recipe. You have to remember that all such “opportunities” are very risky options: you can lose both time and money. Or just time but time is money. While you’re putting effort into pursuing a “get rich fast” business idea, someone has started a real business which will grow into a huge one over the years.

Second of all, it’s often said that you should start a business in a niche that you like, that is your passion. However, sometimes it’s a bad decision. You have to evaluate what would work in your country. Be rational and pragmatic. If you live in a poor country and you want to open a local shop for handmade gifts because you love to embroider – chances are you won’t have customers because people in your country don’t have extra money to buy your handmade gifts. You can still try to sell your works but don’t spend all your savings and time just on this business idea.

Due to my poor childhood, I used to have some limiting beliefs and financial barriers. But I’ve managed to overcome them and since then my life has changed for the better. If you are interested in more articles on financial freedom or my personal story and tips on how to save money, read How to Save Money with No Struggle – Fresh Look, Gratitude Will Change Your Life (+7 Money Rules to Make You Rich), 8 Steps to Make Law of Attraction Work for You.

Also, see my newest blogpost, Motivational Quotes for Success and download free phone wallpapers!

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