I’m an accountant – there’s 8 cash mistakes keeping you broke & why you have to adopt ‘The Rich People’s’ method

A PROFESSIONAL accountant has shared the top eight mistakes people should avoid making in order to save money. 

Nischa explained that she has a degree in finance, a qualification in accounting and has had a career in investment banking. 

YouTube Nischa

YouTube Nischa

The one key skill she learned from experience, she said, is how to handle her own finances. 

And now, in a bid to ensure you can do the same, she’s sharing the takeaways that’s prevented her from becoming “poor”. 

The very first mistake people make, she said, was when people pay themselves last. 

Citing Robert Kiyosaki’s book Rich Dad, Poor Dad, Nischa said: “Robert explained that the way people pay their bills can be broken down into two types. The first way is the Poor People’s Habit and that is through paying yourself last.

“So as soon as your paycheck comes in, you then pay your rent, your phone bill, your subscriptions, you find your social plans and then you’ll save whatever is leftover… If there is even any money left to save. 

“The second method he talks about is the Rich People’s Habit and they do the complete opposite. They pay themselves first and that is what you want to do. Take 10 percent minimum and put that into your savings account the minute you get paid. 

“Treat it like paying a bill. This is so important and by doing this you’re guaranteeing that money will be saved and won’t just slip through your fingers.” 

The second bad habit people have is when they feel comfortable racking up unnecessary debt. 

Nischa said her simple rule for this is to never spend money on something unless she could pay for it outright with cash. 

“I shouldn’t be buying it with any form of debt,” she continued, adding that credit card companies “want you to be bad with your finances because that’s how they make money from this”. 

The third mistake is not having a stockpile, which she said ties in to the first point. Nischa explained that people should have savings that could help them last between three to six months as it gives them “peace of mind” to have a buffer. 

Nischa explained that once you have a buffer, you can start building up an investment fund. 

“Number four is not knowing your income or expenses properly,” she went on. “Until you know what your starting point is, how do you know where you want to be? 

“There’s something called lifestyle inflating and that is when your spending will rise as your income rises.” 

Nischa said this is a “recipe for disaster” before explaining that everyone should have a budget tracker for how much they’re making, how much they pay themselves, their expenses and debt repayments.

She added that people who are on top of their finances are more likely to “build wealth” compared to those who simply fantasise about having more money. 

Number five on Nischa’s list of bad habits is when people have expensive hobbies, including shopping. 

Moving onto the sixth point, she said: “Next up, we have focusing purely on saving. If you want to improve your financial position, you can firstly save more of your existing income or you make more money and create more income streams.” 

The ideal is to do a combination of the two, she continued to say. 

“You want to break the bad money habit of thinking about saving money is going to massively increase your wealth,” she explained before adding that people should be aiming for a pay rise or looking for a side hustle to increase their income. 

Her seventh point on the list is when people pay too much taxes.

She shared: “Taxes are going to be the single biggest expense in your life. Whilst everyone has to pay tax, a lot of people do it without considering how you can legally reduce your bill. Legally, is the key word here.”

“The best way to increase your wealth is through understanding tax rules in a way that stack up in your favour,” she went on. “For example, investing through an ISA or a Roth IRA, which is an investment account that shelters your dividend and profit from taxes or operating under a business instead of an individual if you are a solopreneur. And all of this is absolutely legal.”

Number eight on her list is when people wait too long to invest. Nischa said that leaving money in a bank account means you lose money every year thanks to inflation.

Instead, people should think about investing their money so it starts to work for them instead. 

People flocked to the comments section to share their thoughts on her list as one person wrote: “I’m just getting started in finance, and I immediately realized that I do a few things mentioned here and it makes sense why I really should not”. 

Another said: “Finally!! A video about financing tips that is clear and concise and doesn’t include a life’s story. Thank you so much! I am now a subscriber and I would absolutely appreciate a video on understanding tax rules.”

While a third added: “Habits are so important. Instead of get rid of “bad” habit, it’s always easier to exchange “bad” habit, to better one.”