6 Types of Financial Traps Need to Avoid, According to Japanese Expert
Top common financial traps to avoid in your life
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Money is hard to get and easy to lose!

Unfortunately, we all make mistakes, but we can learn important lessons from these so that we can try to avoid financial traps in the future.

The famous Japanese psychologist and author Ken Honda says that we often only emphasize the importance of financial knowledge. In fact, it's easy to forget that each person is a different being, with different views and thoughts, which directly affect our finances. Attitudes about saving, spending, and investing are all shaped by personal life experiences, and each type of person has a unique way of spending money.

Ken Honda has spent 10 years studying the psychology of money and happiness, he identifies 6 different personality types about money. Here are six of them:

1.Excessive Savings

♦ Signal

You are too conservative to spend money, and you don't have a specific goal in mind. You think that saving money is the only way to get rich and have a stable life.

- You usually buy the cheapest gadgets possible, such as the cheapest phone carrier, a valuable loyalty card, or hunting for cheap airline tickets.

Financial pitfalls

Some people are too frugal, afraid of losing money, so they don't spend a single penny of their savings their whole life. They may even ignore hobbies or activities that bring them happiness.


Thrift is a virtue, but one should not be too frugal. After all, we cannot take any money with us when we die, so avoid excessive savings. Learn how to balance saving money and enjoying life, thinking about the future and seeing what to use your savings for.

2.Excessive Spending


- You often spend money on things that are not really needed, have a low life expectancy like clothes, cosmetics or sometimes technology gadgets.

- You are quite extroverted, thinking that when you have money, you should invite others as a way to bond.

- When life is difficult, your solution is to spend a lot to feel relaxed.

Financial pitfalls

It is a fact that, even if you have some outstanding debt, you will still continue to shop freely. Instead of asking for help from others, you try to hide this from family and friends by continuing to spend more. In some cases, you may fall into default or bankruptcy if you continue to maintain this habit.


Make a clear financial plan, remind yourself of your actual situation. Cut unnecessary expenses, start saving and investing to pay off debt or retire.

Undisciplined Spending

The more you have, the more you spend — or so the saying goes. But not paying close attention to your cash flow may prevent you from saving enough money for your future. Manage your income by creating a spending plan that includes saving and investing a portion of your pay. Your financial professional can help identify planning strategies that can help maximize your savings and manage you tax consequences.

3.Working Hard to Make Money


- You are passionate about work, believe that making a lot of money is the secret to happiness.

- You spend most of your time and effort making as much money as possible. You also feel happy, happy when others recognize and respect you.

Financial pitfalls

People who are "workaholic" will of course have more opportunities to become rich, but they are more likely to neglect relationships in favor of making money. For example, they are willing to work overtime, stay at the company on weekends instead of spending time with relatives, friends or resting.


Remember that life is more important than money, money is just a tool to help us achieve happiness. Besides, if you have great wealth, try to find ways to help others to make society better or to make yourself more comfortable. Don't forget to reward yourself with something after a stressful day at work.

Related: Top 5 Zodiac Signs Who Are Addicted to Work and Abandoning Personal Life

4.Don't Care about Money


- You rarely think about money, don't care about saving or earning more money.

- Sometimes, you think money is something evil, you think money should not influence any important decisions in life.

Financial pitfalls

People who are indifferent to money think that they only need a small amount of money to be happy. This is not bad, but remember that life is not always stable. Things can go bad in an instant if something goes wrong and we don't have a dime in our pocket.


Even if you feel financially comfortable, pay attention to where your money is being spent. Check what you spend, whether you owe anything and have a backup plan for the future. Having an emergency fund ready will save you the trouble of having to face the unexpected.

Neglected Investments

Reviewing your investments to make sure they’re performing as you expected — and making changes in your portfolio if they’re not — is essential. But it’s also essential to periodically review your investment strategy. You may find that your tolerance for risk has changed over time. You’ll also want to assess the tax implications of any changes you plan to make to help manage their impact.



- You are a person who is particularly adventurous, taking risks, thinking that it is a great pleasure.

- You like to invest, are willing to bet money on an unfamiliar field or want to make money quickly without spending much effort. Sometimes you even treat money as a game, with the aim of making life not boring.

Financial pitfalls

The "gamblers" are often caught up in red and black games, easily falling into debt and poverty. Remember, in gambling games, the house always wins, and you will always lose. Things will only get worse if the "gambling addiction" gets more and more out of control, and you start using money in retirement, college funds, ... to cover the loss.


Never touch the life safety reserve. Don't make financial decisions with an element of chance, think carefully before putting money down.

6.Always Worry about Money


- You are always worried that you will lose all your money, always obsessing about the worst case scenario.

You lack confidence in yourself, don't think you have a chance to achieve financial freedom.


Excessive worries will lead to depression, eroding your happiness, making you unable to enjoy life.


Remember that life always has its ups and downs, and it's not always dark. If you're feeling too worried about your finances, reach out to someone you trust and talk to, or see a financial advisor or therapist.

Unprotected Assets

Your life, your property, and your ability to work should all be protected. Life insurance has the potential to provide income for your family if you die. Homeowners and automobile insurance can help protect you if your home or car is damaged or destroyed and provide liability coverage if someone is injured. Disability insurance can protect your income if you’re unable to work.

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