As much as I want to turn back the time, there is no way that I can change what had happened. But what I can do now is to share with you my 5 biggest money mistakes and hoping you could learn a thing or two from them.
1. Not Budgeting My Hard Earned Money
It all falls down on this first mistake. If I actually learned to budget my hard earned money, it will not be hard to save for what is ahead.
A co-worker once asked me, why do I always track my expenses? Tracking your expenses is the best way to know where your money goes. It is one way to cut down on the expenses that are not really needed. You don't realize it but when you don't have any money left to spend, you'll wonder where it all goes.
Lesson learned: Track every single penny that is coming out from your wallet. You'll be surprised at how much you can actually save.
2. Getting A Mortgage House for 30 years
I thought about getting a house of my own is a good idea. Owning a home is a big leap for someone that is not financially stable. When I decided that I want to have a property, I jumped into a PAG-IBIG loan which is payable in 30 years. I didn't think of the other expenses such as property taxes, construction & building permits, house renovation expenses and believe me there's a lot more. I also jumped into the conclusion that I'll be living alone. :D I got my townhouse when I was 27 years old, single and no kids. And when finally I have my own family, my idea of home changes. I didn't consider the location that time and now I am stuck with the 30 years mortgage that we can't live in as there are a lot of factors to consider. Currently, someone is renting our townhouse.
Lesson learned: If I was able to budget my hard earned money (see #1), maybe I was able to save a large amount for deposit that will be a big chunk from the balance. If I learned how to invest early on, maybe I have the right amount to buy that property which I won't be worrying too much if it's being rented because it is already mine. For me, it is still advisable to have the money first before buying that dream house. The less you borrow money, the less you need to repay later as you'll never know how long you'll be strong enough to pay for that loan.
When I finally have that first decent paying job, I first bought a smartphone. Then, I wanted to have an iPhone so I upgraded my old one without thinking how much I can actually spend on it. I don't have the exact amount to buy one but a few network companies offer postpaid. You'll pay monthly for 2 years. I let my emotions carried me away and I even updated my plan after 2 years. So there are another 2 years of completing the plan with a new set of iPhone.
Lesson learned: Come to think of it! If I'll compute the amount that I've paid for almost 3 years for that iPhone, I can actually buy not just an iPhone alone. I let myself get into something that is so quick to be downgraded or lose its value. It is never a good idea.
4. No Emergency Fund.
I had this job which I grew tired and exhausted with because of the travel time going to work. I gave it up after a year. I then transferred to a different company which is near our house. I was still in training so it means that I really need to do good in attendance and performance. It was a Sales account so every day counts. Unluckily, I got sick and it was an infection. And because I was just starting a new job, I don't have a health card yet and no money that was set aside. I was devastated and frustrated. I pitied myself for a stressful situation. I also didn't pass the production stage and they let me go. It was December and I was jobless with no money at all. It was an eye-opener for me.
Lesson learned: Don't live without a backup money and a safety net. Building your emergency fund is not a walk in the park. It takes discipline and delayed gratification. Paying yourself first is the best way to build your emergency fund. This will give you a peace of mind to unforeseen circumstances. An emergency fund is at least 3 months worth of your salary and should be set aside first before any of your expenses.
5. No Financial Goals
You are on your 20's and started working but you don't have any plans yet. Sometimes you just rely on whatever the things are going your way and go with the flow. You will not realize it yet but coming up with your goals especially financially is a great way to focus on your target. This way, you'll prevent yourself from spending too much on unnecessary things. You'll be able to point out your needs vs wants.
Lesson learned: If I was able to set on my financial goals early on, I wouldn't make these 5 mistakes in the first place. But hey, it was worth learning as I will not be here writing for all of you.
To set your financial goals, look for a trusted financial partner. I will definitely recommend looking for a Sunlife Financial Advisor. You don't have to do it alone, you'll need someone to sit down and discuss how to manage and increase the potential of your income. Having a financial partner will help you set on the right track and how to make it happen.
We can never really tell if we can no longer make mistakes. But the important thing is we learned from those mistakes and we take action on not doing it again.
What are your money mistakes and how did you learn from them?
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