Having a sound financial condition seems all but impossible. After the outbreak of the pandemic, it has been cleared that you never know when you will have your back to the wall. Even most stable companies went shutdown, making a lot of people redundant. Some companies are still hiring people, but the market is so doomed that experienced candidates are acquiescing to low wages.
However, some people are not better off, but they are not severely off either. It is because they managed to have a backup in case of a financial emergency. When you are off track, not having a budget, missing emergency cushion, not tracking expenses are blamed, but there are some other mistakes too that you do not realise.
Resigning to the first offer
If you carefully analyse the industry, you will find that employers try to save on salary. Since you have already tried looking for a good job, you do mind resigning to what you are offered, but this is where you slip up.
You should try to negotiate for a salary because the money you get at the end of the month will help you meet your expenses. Make sure that you are being offered that is enough to make ends meet. It must cover your essential and fixed costs like food, rent, travel, and the like. Make sure the amount is enough to set aside some portion of your salary as an emergency cushion.
As you know, employers always try to bring you down, set a higher number, so there is wiggle room to negotiate. Note that if you land a job that pays you as you expected, it does not mean you will spend that extra money.
A good rule of thumb says that you should not increase your spending limit. You can put that money directly into your emergency corpus or settle the debt if you have already taken on. By doing so, you can cushion the blow. In case you run out of money because of a significant, unforeseen expense, a quick loan in Ireland can be your ally.
Accepting negative increment
Many of you think that the more money you earn, the better and vice-versa, but this is not always the scenario. There are a few circumstances when you are running out of money despite earning a fair amount. It happens because you fail to take into account other factors such as inflation.
For instance, you got the hike by 5% while the inflation was 7%. You might be happy with your increment, but this may not be enough to withstand inflation. This kind of increment is considered negative increment.
So when you get increment from your employer, make sure that it aligns with the inflation. Otherwise, you will not be able to cope up with it and end up taking on loans.
Sunk cost fallacy
It is a course of action done from the motivation of your experience failing to take into account what will maximise your benefit at present. Suppose you are shopping in a store and there is a scheme that if you buy clothes worth £500, you will get benefits of worth £500.
These benefits will be deducted from your next shopping straightaway provided you shop within one month. In order not to lose such a great offer, you shop for clothes worth £500 even though you do not need and then revisit the store to buy an additional jacket or a pair of jeans.
Just because you did not want to lose that offer, you ignored the additional cost: your time, money and travel expense. The fear of losing benefits stopped you from making a rational decision. You should not have bought clothes more than you need. Remember that if you continue to buy things that you do not need, you will end up cashing out by selling what you need.
Not realising the opportunity cost
You will have to figure out the opportunity cost for every financial decision you make. Whether you make an investment or buy a printer, you will have to estimate the opportunity cost, and if it is more than the reward you will get, you will lose money.
For instance, if you have decided to transfer money to your saviIt is not surprising that you make some wrong decisions and end up running out of money, but there are some mistakes that you keep making and do not realise. If you do not make the mistakes mentioned above, your financial condition will likely be better. However, if you still find a need for a cash injection, loans in Ireland can help you.ngs account, you should calculate how much money you could earn as a dividend if you invested it in shares of a reputed company. Compare this opportunity cost with benefits you will achieve and then make a decision.
