When people are on a money mission, more often than not their entire focus can be somewhat short of the mark. How many of us are guilty of poring over our choice of cheese in the supermarket, all to make a 40p saving, or of finding that bandit parking place to save ourselves 80p in parking fees whilst we pop to the bank?
There are a number of reasons why we all do this, but there is no doubt, most of us do. In many cases, the reason for this is that people don’t have a good money system behind them to control their finances effectively, so they grab at the minor decisions that they feel are within their reach. These small decisions can make people feel proud, like they are somehow being productive, whereas the big wins that will actually change our lives take a degree of systematic hard work. Here are 3 of the most frequently focussed on areas of money that are very easy to get totally and completely wrong.
People are obsessed with getting out of debt. Since the credit crunch, being ‘debt free’ is like the holy grail of money and something which all working people seem to be aspiring to. The amount of effort people put into arguing down APR’s, switching balances between credit cards and trying to boost their credit score, when all the time they are missing the bigger picture is unreal. What they really should be doing is firstly automating their payments to ensure the money gets paid off the card every single month, as well as cutting costs to get the debt paid off quicker.
2. Earning more
It might seem like an obvious thing to many, but in order to earn more, you have to work more. Unfortunately this concept seems to slip off the radar for many business people and freelance workers who are in the throes of trying to upscale their business and make more money. People spend far too much time obsessing about getting a website, setting themselves up as an LLC, designing their business cards and other minutiae, when what they actually should be doing is just getting on with it.
The hardest part of running a business is having a good idea in the first place. You don’t have to reinvent the wheel to be successful, but you do have to work. All the time that is spent on filling in forms, fiddling with PR materials and organising spreadsheets would be better spent just getting on with it, and soon you will notice the money coming in. With a good reputation and a bank of happy customers behind you, you wont even need those business cards to get new clients.
3. Saving money
People think that in order to save money, they need to get bogged down in making great spreadsheets of budgets, writing down all the non essentials they buy and seeing which ones they can cross out, as well as endlessly searching the web for the account that offers 0.00001% more interest than their current one.
Stop battling with yourselves! Just stick to a simple model of cutting costs, earning more and optimising your spending. This can be as simple as a couple of phone calls to negotiate lower rates on your internet, downgrading your gym membership or not going out for one weekend a month. The other important step to tackling this issue is to set up a regular payment from your current account into your savings account. Make it for a reasonable amount that you think you can afford, and you probably won’t even notice it’s gone.
Ellinas Finance, a Cypriot Public Company Limited, is providing financial services in Cyprus, including check discounting and loans.