Wallet Wellness: 4 Money Mistakes We are Leaving in 2023

Greetings and welcome to the second edition of Wallet Wellness - your midweek source of practical financial tips to elevate your money management skills!

Today, with just 11 days left until 2024, we are taking a look at some of the financial mistakes we should all be leaving behind in 2023.

We hope last week’s 5-step guide on how to conduct an end-of-year wallet wellness check ushered you into the mood of end-year financial planning which will make the mistakes we are highlighting today very eye-opening. 

Let’s dive in!

MONEY254 TIP OF THE WEEK

Out With The Old: 4 Financial Mistakes to Leave Behind in 2023

If there is anything 2023 has taught us, it has to be the fact that we can’t afford to be unintentional with our finances. That our incomes can be severely reduced, or completely wiped off by forces outside our control. 

We have to anticipate and plan for financial upsets. Which means we can’t afford to carry over avoidable mistakes into 2024. That’s the very least we can do. 

Below, we explore four such mistakes that if we leave behind, we will have a better chance at financially winning in the New Year.

Mistake #1: Living Beyond Your Means

One of the few things in life we have full control over is how we spend the money we have. That’s why anyone can live beyond their means no matter their income level. It is defined as spending more than you can afford to. 

And this could be one of three things; either you are spending more than you are earning, spending all that you earn; or you spend less than you earn but you are left with much less than desirable.

Since living beyond your means is more than simply spending more than you earn, many of us are unknowingly making this mistake and consequently derailing our financial goals. 

• Understand the 10 warning signs you are living beyond your means‍

• Choose a budgeting method that works for you and stick to it

• Always prioritise paying yourself first above any expense

• Learn to avoid the allure of lifestyle inflation

Mistake #2: Relying on One Source of Income

2023 has been characterised by layoffs, businesses downsizing and shrinking payslips. It has become increasingly clear that one source of income may not really cut it. The most obvious reason is that if that income stream dries up you are left with nothing, just your savings if you have some. 

• Understand the four factors that affect your ability to make money; skillset, network, mindset and health 

• Aim to create at least one additional source of income in 2024. Read More

• Preferably, explore passive income streams

• Commit to learning the strategies of creating multiple income streams

Mistake #3: Inadequately Planning For Emergencies

In 2020, we were awoken to the fact that health emergencies can turn our finances upside down. This year the potential negative effects of government policies and global politics on our personal finances became crystal clear. That is why planning for the unexpected is no longer an option for those keen on their wallet’s wellbeing.

• Understand the 7 main financial emergencies everyone must be prepared for

• Set up an appropriately-sized emergency fund if you don’t have one yet

• Familiarise yourself with all the options available for where to keep your savings

• Start working towards getting adequate insurance coverage

Mistake #4: Not Thinking Long-term 

Letting short-term convenience dictate your current decision-making is a recipe for regret. Indeed, at the same time, it is not advisable to allow short-term upsets to significantly influence your financial decisions.

Since you are working towards building sustainable wealth, you always have to consider the effects of your current decisions on your wallet’s long-term wellness. 

• Understand how to set goals and the importance of long-term goals

• Long-term thinking often requires delaying gratification

• You have to be ready to make sacrifices, some will be uncomfortable

• For long-term success, consistency not intensity is necessary

CONCEPT CORNER

Securing Financing to Build Wealth

They say, it takes money to make money. But it doesn’t necessarily mean that the money you need to make yourself some money has to be yours. It could be other people’s money (OPM) if you are able to leverage it and build your net worth.

In fact, some of the most financially successful people have built their wealth by being great at utilising OPM. In this article, we explore OPM, its various forms and how you can utilise it. 

PSYCHOLOGY OF SAVING

Why is it So Hard to Save Money?

Despite the advantages of saving money being generally well known in the population, few people save consistently and even fewer people save a significant percentage of their income.

Why so? Saving money can be difficult, and this is not unique to a specific group of people. In this article, we explore the psychological challenges that come in the way of our savings goals. 

MONEY254 #MONEYTOK

Is Social Media Ruining Your Finances?

Still on money mistakes to leave behind in 2023, have you ever considered the effect that social media use has on your personal finances?. It may be subtle but very powerful. We take a closer look in our #MoneyTok below.

@money254hq

"Keeping up with the Joneses" has taken on a whole new meaning in today's younger generation. Fear of missing out (FOMO) - on all the fant... See more

That's it for this second edition of Wallet Wellness! We hope these financial tips have added some energy to your mid-week hustle.

We’ll be taking a two-week break for the holidays and we’ll be back with the next edition of Wallet Wellness on January 10th.

Also, don’t forget to download the Money254 App on the Google Play Store, and remember that we can help you compare over 300 loans, savings accounts, current accounts, and more if you’re thinking about your next product.

We wish you happy holidays, and cheers to your wallet's well-being during this festive season! ✨ 

Eric and the Money254 editorial team.