One of the most important things to consider in your pursuit for a desired financial health is whether you have the perfect control in your saving,spending and borrowing habits.The perfect control here,simply put, being  not over indulging  in what takes away from your finances in comparison to that which leads to its growth while maintaining a target level of comfort.

Therefore,a person out to achieve this should avoid some common mistakes made in spending,saving and borrowing.Interesting to note too is how a lifetime of guaranteed financial mess can be caused by simple missteps in organizing our saving,spending and borrowing habits.Maybe a brief look at some of the mistakes we make can paint a clear picture.

Spending Mistakes

 Mistake: Spending  More than You Have

Today most spending decisions are inspired by the undying desire to fit in regardless of whether our income allows it.Everyone is trying to be part of the next trend and this has led  many to serious financial agony.A quick way to get out of this is by doing an evaluation of what you spend  your money on monthly against your income and if they are totally worth it.This calls for cutting back on variable expenses to a level that fits within your income.

Mistake: Spending  all your income.

Ours is a difficult economy.You might be in a job today and tomorrow you're out there looking for a job.Do you have finances to cater for that period? Also,considering the in-eventualities that have become common to life you can't be sure when you'll be in dire need of money to cater for an emergency.So what happens when you've developed a habit of spending all your income-Living from paycheck to paycheck? The key solution here is to operate with a strict budget and clear focus on  saving part of what you earn.

Mistake: Spending on what you don't need

Mostly driven by impulse,this one has to be the worst of the spending habits  because if uncontrolled it can lead to spending all your income or spending more than you actually earn.That can only mean one thing-debt.Again a budget and some level restraint is key.

Saving   Mistakes

Mistake: Starting too late

Majority of  people in their first jobs,mostly twenty somethings,rarely focus on saving part of what they earn.Their money is focused on spending driven by the belief that they are too young and have the advantage of more years ahead.Clearly,someone who starts saving at 25yrs has the advantage of ten years over someone who starts saving at 35yrs.What of the opportunities you miss along the way that you can pump your money on to grow it? Earning? start saving today.Period.

Mistake:Not Shopping for the right bank.

 Is your bank offering the best rates for your savings account? Since the competition is stiff in the banking industry today  most banks have also taken it upon themselves to offer enticing offers to go with saving with them,are you aware of all these?It costs nothing to shop around to find the right bank.

Mistake: Ignoring economic factors like inflation

In my previous article (link) I highlighted the importance of basic Economics knowledge and how it can impact your saving habits.The focus was on interest rates and inflation.For instance if you're saving to achieve a certain financial goal in the future,it's important to note what your money is worth now is not what it will be worth in the future due to inflation.This knowledge then would help you adjust your savings to avoid falling short.Important-Know about inflation and its effect on your money.

Borrowing mistakes

Mistake: Borrowing to finance a lifestyle

Most middle class are guilty of this financial sin.Borrowing to fund a lifestyle is a  sure way to sink your self deep into serious debt.A better strategy would be borrowing to fund an investment whose returns would fund your lifestyle eventually.For instance,taking a loan that is repaid at an interest of 16% to finance an investment that would bring you annual returns of 18% would mean you're able to service your loan and have an extra 2% for your spending.Though this is only advisable if you're sure of the investments returns and if  the returns are not not achieved  once the loan matures.Plus,If  you have to borrow to finance a lifestyle then you're living beyond your means.In this case avoid the loan.

Mistake: Borrowing at the wrong time

The most important thing to consider before taking a loan is the cost of repaying it.One simple way of doing this is shopping around to find out the repayment terms of loans offered by different financial institutions.Considering the CBK set interest rates would also be helpful as it's the major influence behind the rates set by different commercial banks.Simply,High CBK interest rates would mean it would be costly for you to borrow so a bank that offers relatively lower repayment rates would be your first consideration.

Shop around before taking a loan.Beware of the CBK rates to know which bank is relatively fair.

Mistake: Over -borrowing

One of the best ways to make your life a living hell is to allow the amount you owe be higher than what you actually earn.Being deep in Debt can lead to loss of important  assets you hold.Mostly,people borrow money for genuine reasons,say the need to cater for an emergency,but some decisions call for a moment of soberness.Do you really need another loan,be it from an individual or a financial institution? The way forward here is to Set up an emergency fund to avoid debt in times of emergency and follow the basic rule of thump-clear one loan before getting into another and that is if you don't have another option other than debt.In case you get into debt clear it as quick as possible.

Maybe now you know why you always seem to have large tracts of month at the end of your money