Financial lack is a product of making financial mistakes over time. Our lives positions are determined by the quality of decisions that we make over time. This is also true for our financial position.

If you constantly make financial mistakes, you become poor and lack. It does not matter how educated or intelligent a person is, the consequences of making these financial mistakes are the same for all.

This is what happens to the middle class. These are people who are intelligent and educated enough to get a good job but they lack financial intelligence.

They keep earning and not knowing what to do with what they get. This is why the struggle constantly financially even though they make a lot every month.

Such people have a house that they call an asset and a car that they keep upgrading every few months. The car keeps depreciating and consuming money for fuel and service.

The problem is not the car, the problem is that they bought the car on loan and they fuel it using their only source of income i.e their salary.

This is how most people live rich but are very poor. They have a dozen of liabilities that are milking them dry at the end of the month.

This does not have to be you. You can choose to walk in financial prudence. You might have lost much time committing these financial mistakes but you have time left to do the right thing.

Do not be like the middle class. If you have the intelligence to earn money, you can also multiply it and create wealth.

13 major financial mistakes

If you can avoid these financial mistakes, you will forever overcome financial struggles. Let’s look at each.

1. Lack of financial goals.

Setting goals is the first step to progress. Without goals, there will be no motivation to keep working. After all, you have nothing to work for.

Financial goals are crucial to financial success. Many poor people do not have financial goals or their goals are not big enough to motivate them to work hard.

Your financial goals should be SMART:

·     Specific- They should not be ambiguous.

·     Measurable- You should be able to measure progress with time.

·     Attainable- Do not set goals that are impossible to achieve under your prevailing circumstances.

·     Relevant- Your goals should be relevant to what you want to achieve and what you are undertaking.

·     Time-bound- Make sure that your goals are set to be achieved within a specified time.

For example:

·     I am earning 3000 dollars now but I will be earning 5000 dollars every month an year from now. This goal is SMART. It is very Specific, Measurable, Attainable, Relevant, and Time-Bound.

Setting goals is the foundational step of every success. Make sure you have SMART goals for your life.

Divide your goals into:

·     Short term goals- A year or less.

·     Intermediate goals- Between 1 year and 5 years.

·     Long-term goals- More than 5 years.

With such goals, you are ready for financial progress.

2. Lack of financial knowledge

This is another major financial mistake that people make. They learn about everything else and never about money. This is why they know so much but they still struggle financially.

One may have a Ph.D. in Medicine or Engineering but if they lack basic financial knowledge, they will always struggle financially.

Financial intelligence involves understanding the three levels of making money. That is:

·     Earning money.

·     Spending money.

·     Investing money.

People who lack financial intelligence only know how to earn money by working in a job. They are poor at spending and even poorer in investing. This is why they struggle financially.

You can get financial intelligence by reading great financial books or blogs. I recommend Rich Dad Poor Dad by Robert Kiyosaki. This blog is also a good place to gain financial intelligence.

3. Spending more than you should

Many people spend more than is right. When they get income, they buy everything that they want and they are left with nothing to save and invest.

As they wait for the next income, they accumulate another list of wants. Once they get the income, they rush to the mall and satisfy their wants.

To avoid these:

·     Only buy needs until you are financially free to buy wants.

·     Make sure you have a budget.

·     Automate your savings. Let the bank deduct part of your income into a fixed saving income even before you get the income. This is called paying yourself first.

·     Get serious with your financial goals.

There is a 50:30:20 rule. 50% for needs, 30% for wants, and 20% savings.

This is a rule for the average person. As you become more serious with your financial goals, you will start saving and investing more and more. Many millionaires invest more than 70% of their income.