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Money Mistakes to Avoid

Quote of the Week: “Only put off until tomorrow what you are willing to die having left undone” – Pablo Picasso.


When it comes to finances everyone, from time to time, will make mistakes and think “if only I had done this instead of that”. Hindsight is 20/20. We tend to be more knowledgeable about the consequences of our actions when we are analyzing them after the event. Wouldn’t it be nice if we could use lessons from past mistakes to avoid making them in future?

It is probably easier to avoid financial pitfalls if we were aware of the experiences of others. Here are some financial mistakes you should avoid.


Postponing what we should have done yesterday is a self-defeating approach in life and in personal finance. Unless you are doing it as a matter of priority, postponing is just wasting your own time. Purpose to do what needs to be done now. Stop telling yourself you will save next month. Save now. Stop saying you will invest when you get a pay rise. Invest now. You don’t have to wait for the New Year to set your goals. Make that plan and budget today. Stop procrastinating and take action today.

It will feel much better to achieve your financial goals soon rather than having regrets later in life. Remember, time is money.


There is a very big difference between speculating and investing. Speculating is when you buy something with the expectation that the price will go up but not on the basis of any fundamental reason. When you speculate, you are expecting a high gain but there is a risk of losing everything. It is very similar to gambling. Speculating is founded on hope.

Investing, on the other hand, requires that you focus on an opportunity with a greater upside potential based on sound fundamentals. You have to do your homework here. When you invest in an asset, you expect it to generate income or appreciate in value. Investment is founded on reason.

Seeking out bigger returns by taking bigger risks should not be a justification to speculate, since a large loss can scar you and set your investment plans back altogether.

Lack of a strategy

Failure to plan is planning to fail, so goes the common adage.  When it comes to investing, preparation involves setting out your position on key factors like the time horizon in which you intend to meet your financial goals, and what assets you may want to invest in relative to your goals. All these constitute your personal investment plan which will help you adhere to a sound long-term strategy even when current market conditions are unsettling.

[Read More: Four Steps for the Perfect Financial Plan]

Lack of diversification         

The best way to manage risk in investment is to diversify your holdings so that they are not adversely affected during market downturns.

For a savvy investor, allocate your funds in different asset classes such as listed companies’ shares and government securities, and then diversify within each asset class, all the while keeping your personal investment guidelines in mind.

If you don’t want to get involved in all that work, just put your money in a Unit Trust such as the Zimele Savings Plan. Such funds a well-diversified and are professionally managed.

You also need to diversify your income. Do not depend on only one source of income. Start a side hustle and grow it.

Not having an Emergency Fund:

One common financial planning mistake is not having a rainy day fund. You never know what is going to happen in the future. It is always a good idea to put away a small amount of money each month, just in case. Obviously you should be realistic about what you can afford, but possibly cutting back on non-essential purchases could give you some extra cash to put aside for emergencies.

Keep your emergency fund somewhere where the money grows at a rate higher than the inflation rate. Like in the Zimele Savings Plan. That way, your money does not lose value and it’s constantly working for you.


In the end, your success on avoiding these potentially damaging financial mistakes depends heavily on your discipline. If you have a lot of money but you lack discipline, you will not be able to enjoy it for long. If you have any amount of money and you have the discipline to be diligent, you will grow your money and enjoy it for years.

Building your financial discipline can be difficult and requires a lot of sacrifice, but the benefits that come with it clearly outweigh the costs.



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