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Have you ever thought why most often than not, you feel trapped in the vicious cycle of cash inflow and outflow? Do you feel like you do not have enough money at the end of the day, even though you earn a handsome amount? If the answer to any of the above questions is YES, then this article is for you.

The answer is very simple and obvious but many of us choose to ignore it – Inability to track our expenses

Small and impulse expenses gradually create a hole in our pocket and we do not recognize it till it is too late. It might be a late fee payment, accepting chocolates in exchange for change, adding stuff to your cart on the way to check out and so on. All these are few examples of mindless spending and waste of money. Companies use various marketing and promotional tricks to lure customers into buying more than what they actually need. If only individuals can see through these tricks, then there might be a chance that they will have some extra cash to be used towards their future goals and savings.

Errol Flynn, an Australian-born American actor, has rightly said - "My problem lies in reconciling my gross habits with my net income."

It is not that people don’t want to save money.Trust me they do and they even follow some great money saving tips. Few of those tips are actually good such as traveling in economy class, avoiding eating out or staying away from expensive habits like smoking or drinking and so on. However, they get carried away with money saving tips and fall prey to impractical habits.

The best examples of useless and even harmful activities can be opting cheaper staying options for vacations or buying a second-hand car instead of new one to save few bucks or spending on poor quality products available at low cost. These options might look great for short time but they are not going to help you save any money in the long run. In reality, these bad choices will make you spend more in general and unexpectedly..

We all keep wondering about our money but the fact is all of us are focused on spending on liabilities rather than investing in assets. Liability can be anything which depreciates in value with time like car, clothes, branded items etc. and assets are things which increase in value with time.

I think people tend to spend on unnecessary things because of factors like social status, ignorant use of credit cards and not knowing what they need or don’t need. You will relate to this statement of a famous actor, Will Smith, that "Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like."

Below are the reasons why many people are never able to save money even though they think they are doing everything right

LIFESTYLE – I consider this a very dominant factor when it comes to unnecessary spending. Many people choose social status above financial security. They focus more on spending on liabilities to maintain a particular lifestyle instead of building assets. This results in huge credit card bill and huge debt burden. Debt can be good only when they are helping in asset building processes like a mortgage or few business debts.

FINANCIAL LITERACY – The reason to include this factor in this list is very simple – Ignorance is not a bliss when it comes to your financial security. Many people fail to save money as they do not follow a budget. A budget can help in tracking the expenses in an efficient manner. Also, we should try to regularly update our financial knowledge. There are many ways where we can learn something new about financial planning at minimum or no cost. For example, via online courses, books or basic online research

NO DISCIPLINE – If you ever want to have enough money that you can feel financially secure in future then self-control and discipline are very important when it comes to money. Create a financial plan and follow it diligently. Most people fail at this level as they do not have the discipline to follow any plan. There are numerous examples of self-made millionaires who vouch for this time tested process of creating wealth. Stay frugal, follow a budget and always save a small part of your income on a regular basis.

If you like to understand more about spending patterns that are damaging your financial health then you can consult a financial advisor for expert opinion. You can also refer the famous book called Rich Dad Poor Dad by Robert Kiyosaki to increase your basic financial understanding. It offers great financial information about cash flow, real estate, investing and so on.

We would also be glad to help you personally with your financial questions to secure a better future for you and your family.

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