The most pivotal financial mistake of my life stemmed from a lack of foresight and planning. By no fault of mine, I grew up in a culture that focused on the here and now rather than the here, the now and the future. Without a structured financial plan in place, I focused on short-term gains and overlooked a crucial factor: long-term sustainability.
I was born in Zambia, a small quiet country in Southern Africa. I grew up around hard working and diligent folks who emphasized the importance of saving but not investing. Saving meant keeping enough money to cover your expenses until the next paycheck. When I was 13, I immigrated to the US where I have been since. I got my first paying job in college, working in the cafeteria. I was making decent money, grossing enough to cover my minor expenses on campus. I decided to get a second job since I was able to do so. I did this for most of my college stay. After I graduated, I began hearing about student loans and how I had to start making payments on those. I was unaware of the devastating effects and impact not paying your student loans could have on your credit score. So, I continued to work and only made a few payments towards my student loans, and then I blissfully and ignorantly left the country to work in other parts of the world. When I finally returned to the US in 2020, I was met with my growing student loans and the mess that came from not having a plan for them. My one particularly ill-fated decision not to plan ahead or do my own research led to a sobering lesson in the importance of financial planning.
Although I worked hard throughout my college career and thereafter, saved my money and covered most of my expenses, my inability to set a proper financial plan led to a financial pitfall that could have been easily avoided. I was left vulnerable and had to start from scratch. But this time I was determined to do things differently.
My solution to avoiding my previous mistake was simple: develop a clear, realistic and comprehensive financial plan. The key component there is planning. So, I crafted a well-thought-out plan that provided a roadmap to navigate economic uncertainties (remember COVID 2020?) and mitigate potential losses. This was my simple plan and here’s how you can approach yours too:
Assess your current situation
Set clear goals
Create a budget
Regularly review and make necessary adjustments
Seek professional advice
This experience profoundly shaped my approach to financial management, instilling a commitment to helping others avoid similar pitfalls by emphasizing the critical role of planning in achieving long-term financial security and stability. This plan is helping me minimize the likelihood of making impulsive or ill-informed financial decisions and building a solid foundation for long-term financial success and security.
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