Kevin O’Leary, one of the biggest sharks in the business world, gives you the antidotes to these sadly common behaviors.
“How much does it cost you to live?” If you do not know the answer, you could be on the road to financial disaster. If not today, soon, warns Kevin O’Leary.
When it comes to your own money, this famous participant of Shark Tank United States knows that attention to detail is indispensable. When I was growing up in Montreal, Canada, “Mr. Wonderful “(as it is also known) kept a part of every dollar he received for work or gifts. Even today, the multimillionaire of the 61-year mutual funds continues with this practice.
We asked him what he thought were the stupidest mistakes people make with their money and how to avoid them. This was what the “genius of frugal finance” answered us.
The error: Spend money on “junk” that you will not use
“Most people buy ‘junk’ they will not use. This affects men and women equally, especially when it comes to clothes. You love to go shopping, but the truth is that if you study your wardrobe you will see that you wear the same clothes 80% of the time. The rest of what you have bought is saved. ”
The solution: Invest in high-quality clothing and, in fact, use it
“If you are going to buy fashion clothes and accessories, make sure they are things that have a time-proof style, that have a high value and that you like to think about them. Save your money and use it for high-quality things and be very selective. It will be good for you in the long term. I like to wear the same style of dress every day. I have 20 of them, so I do not have to worry about my style. I always travel with 4 of them and use them until I finish them. Then he gave them to charity. ”
The error: Do not know your monthly expenses
“It amazes me that even very rich people I know do not know how much their monthly spending goes up. Regardless of whether they are single, married, single parents or anything else, most people do not know how much it costs them to live 30 days. For me, that is living at risk. ”
The solution: Calculate the cost of your life and make a budget
“Write everything. Record your spending habits and your money inflows. Capture them to the smallest penny in a period of 90 days. Do it with paper and pen, do not use a computer. Then make a budget and stick to it. ”
The error: Spend more than you earn
“Not knowing how much you earn and how much you spend puts you at risk, freezes you financially. Many times you will see that you spend more than what you enter “.
The solution: Tighten your belt and do it now
“It’s simple, but it requires discipline: spend less and save more. Adjust your lifestyle because over-spending usually manifests as debts on credit cards, which can be so costly that they end up burying you. ”
The error: Accumulate debts on various credit cards
“It’s horrible to have a debt for credit cards. Under no circumstances is it good to have only one debt of this type, much less several unless you can settle them at the end of the month. Even then, better avoid them. ”
The solution: Get rid of those cards forever
“Pay your credit cards and then cut the plastic. You will not regret. It’s the best thing you can do to improve your financial position. ”