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9 Dumb Habits You Never Realized Make You Earn Less

9 Dumb Habits You Never Realized Make You Earn Less

We live in a capitalistic society; what that means is money is up for grabs for anyone with the ingenuity and perseverance to chase it. Jumping in a wind tunnel full of Ben Franklins and grabbing as much as you can is profitable, but you can’t do that for a living. Instead you have to plan and execute specific actions to ensure you remain financially solvent. If you want to spend your retirement years swimming in a vault full of coins like Scrooge McDuck, avoid these nine dumb habits that keep you from earning money.

1. Float Like a Social Butterfly.

Social media is a useful marketing tool, and every so often you need to connect with your followers. The problem comes when you spend all your time on social media. The likelihood of links posted in social media being clicked is dependent on how many followers you have. Expect a 1/1000 ratio (one person clicking a link for every thousand that view it) on average, and don’t waste all your time marketing on social media.

One of the easiest ways to avoid wasting time on social media is to avoid reading feeds. If you use Twitter to keep up with trending topics, make a list to ensure you’re only seeing the subsection of people you follow whose updates consistently keep you in the loop on topics you follow. Also, downloading a social media aggregator such as Hootsuite or RebelMouse will allow you to merge multiple social media accounts, so you can expand the reach of your message while minimizing time spent socializing. Now get back to working on something more important!

2. It’s Called a Lunch Hour for a Reason.

It’s OK to take breaks, and we have a great lifehack discussing the importance of them. If you work for a company, it’s mandatory they give you a break; if you work on your own, you need a lunch break to give you time away from working. An hour is usually a decent enough break, although 30-minute and two-hour lunches have their uses as well. The problem comes when your lunch takes up too much of your work day.

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You don’t want to eat a heavy meal that will make you lethargic, and as for heading to the movie theater every day at lunch: you’re triple-dipping into your resources, as you’re not being paid to work, spending money with no return, and wasting time that could be productive. If you’re going to take a long lunch, you need to make up the hours on the back-end, or you’ll never get ahead financially.

3. Waiting for the Right One.

Some people will turn down job offers because they’re waiting for the right one. This does have its advantages, but you can still be doing something to make money while you’re waiting. Instead of sitting by the phone, waiting for someone to call, try pursuing odd jobs, temp work, or selling art online.

You can also pick up freelance and temp work or get paid to blog as a guest expert. The internet is filled with ways to make money online. Make use of the time you’re waiting to make money by making money, or you’ll never make any money.

4. Me Fail English? Unpossible!

Communication is important; if not for communication, human beings would never have banded together to form society, invention, and the Internet. If you don’t know how to communicate what you want, you’ll never get it. It goes much deeper than just a grasp of the mechanics of English, though.

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The world is filled with people with a variety of backgrounds, experiences, and beliefs. It’s important to understand how to craft a message specific to your audience. Different words and phrases are taken different ways by people with different perceptions. Be sure to think carefully about the methods, words, and tone used when communicating for business. Otherwise you’ll come off as either overly wonky or out in left field. Either way, people will perceive you as incapable and won’t want to hire or pay you.

5. Motivated by Money.

It’s OK to be motivated by money, but it shouldn’t be the sole motivation driving you. In order to keep up with inflation, at the very least, you need a decent and consistent raise. We have several lifehacks discussing how to ask for a raise, and it all involves proving your worth before asking for more money. If the only reason you’re working is for money, it’ll show in your work. You may think you do enough, but there is always someone doing more, and they’ll get the hefty raise you wanted.

The same thing works for promotions; if a hiring manager has to choose between someone whose focus is on making more money vs someone whose focus is helping the company get ahead, it’s clear who will receive the promotion. We discuss other ways to get a promotion in this lifehack. By working on a career path you love, you’ll reach monetary bliss well before your financially-motivated foes.

6. The Early Bird Stole Your Worm.

I have a goal to see as many sunrises and sunsets as I can in my life. It’s OK to sleep in every so often, but according to the 11 sleep habits of successful people, waking up early (and consistently doing so) is the key to success. It may not be your personal key, but it is to someone; just because you’re sleeping in doesn’t mean everyone else is. If you sleep late, know you’ll have last pick of available jobs, gigs, and opportunities to make money.

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7. You Just Practice, Baby … Practice.

One of the biggest mistakes people make is being too scared to follow their dreams. You tell yourself there’s a risk, and the timing isn’t right, so you fall into neutral and treat your life as though it’s all just practice for some future event that never happens. Instead of looking into some unknown optimistic future, focus on the here and now. Treat your life like it’s always game day, and live like you’re never going to die. When you work hard enough, the money comes sooner or later (and loving what you do makes the wait easier).

8. I’ll Procrastinate Tomorrow.

Procrastination is the single biggest reason for loss of productivity. You may not want to do something right now, but you’re not going to want to do it later either. The time between now and then will be filled with stress and wasted thoughts about something you could already have done by now. Instead of putting things off, get to work!

I realize this is easier said than done, so we’ve prepared lifehacks to help you identify the types of procrastination, techniques to manage it, and ways to make procrastination productive for those inevitable times when you actually need to put things off. Combining these tools and techniques, you’ll be able to eliminate procrastination’s negative effects on your bank account.

9. You Quit While You’re Ahead.

Stop getting comfortable every time you get a paycheck – it’s the equivalent of stopping for gas at every gas station you pass while driving across the country. Payday Friday isn’t a day to run out and waste all your money on overpriced beer and appetizers (and yes I’m aware it’s “cheaper” during happy hour).

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Bonuses aren’t free money either – if you’re lucky enough to get an extra paycheck month, pay raise, bonus, etc, don’t overspend on your celebration, and don’t think now’s the time to sit back. Whoever gave you that money did so because they love what you do, and that love can fade quickly if you rest on your laurels. If you let your financial situation determine how hard you work, you’ll always be broke, because that’s the only time you’ll ever work hard.

Making money isn’t difficult; every year Forbes releases a list of people who make the majority of the money in the world. Instead of envying these people, pick up the pace. It’s a rat race out there, but if you navigate efficiently and run the maze fast enough, you can prove your worth by earning the money you think you deserve.

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Last Updated on September 2, 2020

How to Set Financial Goals and Actually Meet Them

How to Set Financial Goals and Actually Meet Them

Personal finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. That’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

In this article, we will explore ways to set financial goals and actually meet them with ease.

4 Steps to Setting Financial Goals

Though setting financial goals might seem to be a daunting task, if one has the will and clarity of thought, it is rather easy. Try using these steps to get you started.

1. Be Clear About the Objectives

Any goal without a clear objective is nothing more than a pipe dream, and this couldn’t be more true for financial matters.

It is often said that savings is nothing but deferred consumption. Therefore, if you are saving today, then you should be crystal clear about what it’s for. It could be anything, including your child’s education, retirement, marriage, that dream vacation, fancy car, etc.

Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives that you foresee in the future and put a value to each.

2. Keep Goals Realistic

It’s good to be an optimistic person but being a Pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going beyond what you can realistically achieve will definitely hurt your chances of making meaningful progress.

It’s important that you keep your goals realistic, as it will help you stay the course and keep you motivated throughout the journey.

3. Account for Inflation

Ronald Reagan once said: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.” This quote sums up what inflation could do your financial goals.

Therefore, account for inflation[1] whenever you are putting a monetary value to a financial objective that is far into the future.

For example, if one of your financial goal is your son’s college education, which is 15 years from now, then inflation would increase the monetary burden by more than 50% if inflation is a mere 3%. Always account for this to avoid falling short of your goals.

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4. Short Term Vs Long Term

Just like every calorie is not the same, the approach to achieving every financial goal will not be the same. It’s important to bifurcate goals into short-term and long-term.

As a rule of thumb, any financial goal that is due in next 3 years should be termed as a short-term goal. Any longer duration goals are to be classified as long-term goals. This bifurcation of goals into short-term vs long-term will help in choosing the right investment instrument to achieve them.

By now, you should be ready with your list of financial goals. Now, it’s time to go all out and achieve them.

How to Achieve Your Financial Goals

Whenever we talk about chasing any financial goal, it is usually a two-step process:

  • Ensuring healthy savings
  • Making smart investments

You will need to save enough and invest those savings wisely so that they grow over a period of time to help you achieve goals.

Ensuring Healthy Savings

Self-realization is the best form of realization, and unless you decide what your current financial position is, you aren’t heading anywhere.

This is the focal point from where you start your journey of achieving financial goals.

1. Track Expenses

The first and the foremost thing to be done is to track your spending. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you will be surprised by how small expenses add up to a sizable amount.

Also categorize those expenses into different buckets so that you know which bucket is eating most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pumping up your savings rate.

If you’re not sure where to start when tracking expenses, this article may be able to help.

2. Pay Yourself First

Generally, savings come after all the expenses have been taken care of. This is a classic mistake when setting financial goals. We pay ourselves last!

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Ideally, this should be planned upside down. We should be paying ourselves first and then to the world, i.e. we should be taking out the planned saving amount first and manage all the expenses from the rest.

The best way to actually implement this is to put the savings on automatic mode, i.e. money flowing automatically into different financial instruments (mutual funds, retirement accounts, etc) every month.

Taking the automatic route will help release some control and compel us to manage what’s left, increasing the savings rate.

3. Make a Plan and Vow to Stick With It

Learning to create a budget is the best way to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be organized

Nowadays, several money management apps can help you do this automatically.

At first, you may not be able to stick to your plans completely, but don’t let that become a reason why you stop budgeting entirely.

Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options, and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

4. Make Savings a Habit and Not a Goal

In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that, in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

Make savings a habit rather than a goal. While it might seem to be counterintuitive to many, there are some deft ways of doing it. For example:

  • Always eat out (if at all) during weekdays rather than weekends. Weekends are more expensive.
  • If you are a travel buff, try to travel during off-season. You’ll spend significantly less.
  • If you go shopping, always look out for coupons and see where can you get the best deal.

The key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice, which will be harder to sustain over a period of time.

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5. Talk About It

Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission.

Therefore, in order to stay the course, surround yourself with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

6. Maintain a Journal

For some people, writing helps a great deal in making sure that they achieve what they plan.

If you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

When you have a written commitment on paper, you are going to feel more energized to follow the plan and stick to it. Moreover, it is going to be a lot easier for you to track your progress.

Making Smart Investments

Savings by themselves don’t take anyone too far. However, savings, when invested wisely, can do wonders.

1. Consult a Financial Advisor

Investment doesn’t come naturally to most of us, so it’s wise to consult a financial advisor.

Talk to him/her about your financial goals and savings, and then seek advice for the best investment instruments to achieve your goals.

2. Choose Your Investment Instrument Wisely

Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about the common ones, like a savings account, Roth IRA, and others.

Just like “no one is born a criminal,” no investment instrument is bad or good. It is the application of that instrument that makes all the difference[2].

As a general rule, for all your short-term financial goals, choose an investment instrument that has debt nature, for example fixed deposits, debt mutual funds, etc. The reason for going for debt instruments is that chances of capital loss is less compared to equity instruments.

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3. Compounding Is the Eighth Wonder

Einstein once remarked about compounding:

“Compound interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.”

Use compound interest when setting financial goals

    Make friends with this wonder kid. The sooner you become friends with it, the quicker you will reach closer to your financial goals.

    Start saving early so that time is on your side to help you bear the fruits of compounding.

    4. Measure, Measure, Measure

    All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments and taking stock of how our investments are doing.

    If we don’t measure progress at the right times, we are shooting in the dark. We won’t know if our saving rate is appropriate or not, whether the financial advisor is doing a decent job, or whether we are moving closer to our target.

    Measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

    The Bottom Line

    Managing your extra money to achieve your short and long-term financial goals

    and live a debt-free life is doable for anyone who is willing to put in the time and effort. Use the tips above to get you started on your path to setting financial goals.

    More Tips on Financial Goals

    Featured photo credit: Micheile Henderson via unsplash.com

    Reference

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