Personal finance is one thing that shouldn't be treated carelessly by anyone who wants to experience any form of financial progress, and it requires complete caution because you can't be too careful with anything pertaining to your finances. Being careless with one's finances practically always doesn't end well, and it's always that way since you have automatically exposed yourself to things like debt, financial insecurity, and others.
I am honestly not a financial advisor and have made numerous financial mistakes in life that have helped me improve how I manage my finances. I am fond of learning from not just my mistakes but from other people as well, because it is very crucial. Failure to learn is what causes the repetition of one financial mistake that is capable of keeping us down forever.
The world we live in today has changed a lot, and every individual's approach to their financial life isn't exempt. Over the years, a lot of people have been able to make significant changes that sparked progress, while it's the other way around for people who are obsessed with financial trends. I tell people a lot that everyone can't make the same financial decision and get it right; what works for Mr. A might not work for Mr. B, which is why I mentioned earlier the need for cautiousness in our financial lives.
From my experience in life, I have learned a few financial lessons that I am always eager to share with people, and this is the perfect opportunity to do so.
Impressing people with your financial life is one mistake a lot of people make, and that's one of the easiest ways to ruin your financial life if care is not taken. You can impress people with your knowledge, fashion sense, and skills, but not with your finances. It's not something you can toss around carelessly because a single mistake can lead to the unexpected. A lot of people ignorantly impress people with their financial lives, not knowing that's what they are actually doing.
Let's talk about some behaviors that mean you impress with your financial life. They include financial comparison or competition, lack of financial discipline, bowing to peer pressure, living above your means, and others. All these have negative effects on our financial lives and must be avoided if financial progress is a priority for us.
Another common financial mistake among people today is lifestyle inflation, and if we look critically, it's somehow connected to impressing people with our financial lives.
Lifestyle inflation is a situation where people increase their spending just because of an increase in earnings. One thing that helps me a lot with my financial life is living way below my income because life can be very unpredictable. I have been called stingy and other names because of my habit of living below my means, but it doesn't bother me. Lifestyle inflation is so terrible, and it's capable of making your increase in earnings quite insignificant because, in the end, there will be nothing to show for it.
I didn't know the importance of doing away with financial inflation, but it has always been my way of life. All through my time at my previous place of work, I lived in a single room, where I used to stay before I got a job. My friends teased me a lot about it, but I had a better plan. It wasn't like I wasn't living well; I was very okay, but getting an apartment that would drain me financially wasn't an option. For that reason, I was able to save for something more important.
At the time some staff were displaced at work, a lot of us were affected, and because we couldn't get a job immediately, life became miserable for some people because maintaining their inflated lifestyle was impossible.
It wasn't like life was perfect for me after, but it was fair to an extent, and that experience taught me why it's very important to run away from an inflated lifestyle. I live in a bigger apartment today, not because my income is enough; it's because I need space for my family. When the need for an improved lifestyle comes, there is no point in holding back, but when it's not necessary, living below our means is important.
No one is above financial mistakes, like I mentioned earlier, and there is a need to always be careful. Our financial life is a journey, not a destination, so the more we travel through life, the more the more we learn and add more value to ourselves. Impressing people with our finances is pointless because when we eventually go broke, we will be left alone with the problem.
Financial inflation as well wouldn't take us anywhere and somehow, putting tomorrow in consideration always can help us do away with impressing people with our financial life and financial inflation.