Don't Make It: Three Mistakes That Make People Poor

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Even people with an average income can find themselves in a difficult situation.

Many people face difficulties in managing their finances, and this is not always due to mental blocks. Often, the most common mistakes stand in the way of financial stability, which invisibly drag them into poverty.

Living beyond means

This is one of the most common financial mistakes when a person spends more than he earns. Instead of matching their income to their expenses, people often resort to loans, payday purchases or debt obligations to meet their current needs and wants. This can lead to a debt hole and a constant lack of funds for more important purposes, such as savings or investments.

Lack of financial planning

When a person does not have a clear plan for distributing his income, money is spent randomly , without prioritizing goals and accounting for future needs. This results in important expenses such as savings, investments or large purchases being overlooked. Without planning, it is difficult to control income and expenses, which increases the risk of falling into a debt trap.

Accumulating high-interest debt

A serious financial mistake that can quickly worsen your financial situation. When a person takes loans or uses credit cards with high interest rates and does not manage to repay the debt on time, the debt begins to grow exponentially. Monthly payments are increasing, a significant part of the funds goes to pay interest, and not to repay the principal amount of the debt.