It’s very easy to worry about the financial struggles that we face each day, but it’s much harder to think about our financial futures and how our current situations will impact the days to come. Bad financial decisions are a part of life. Our financial situations can change in the blink of an eye, and thinking about both the short term and long term will help you be most prepared for anything that comes your way. If you want to be more prepared for what’s to come, avoid making these bad financial decisions and you’ll be better apt to deal with what life throws your way.
Forgetting to Save for Retirement
Neglecting to put anything aside to live off of in retirement is one of those very bad financial decisions that happens all too often. Most people don’t even let the thought of saving for retirement cross their mind. They either think that retirement is too far away to plan for, or they don’t have the money to put into their 401k or IRA. Both of these ways of thinking will put you in a tight spot and you’ve got to change your perspective. No matter how small the amount is, you should always make it a point to add money to your retirement account and if you don’t have one yet, you should get one! Retirement age will be here before you know it and nothing is worse than having to scrounge together enough money for you to live off of when you can’t work anymore.
Not Putting Anything Away for Emergencies
If you’re not setting your extra money aside in an emergency fund, you’re making one of those bad financial decisions that you’ll regret in the future. All people will experience some kind of big emergency in their lifetime: whether it’s the loss of a job or a necessary car repair that needs to be done right away. When you have money set aside that you can use in dire situations, you’ll be able to get yourself out of a tight spot without having to borrow from someone and that will feel great.
Ignoring Your Debts
The root of a lot of bad financial decisions begins with allowing your many debts to sit and grow larger. Paying debt off is annoying and hard to do, but sticking with it will do you good in the long run. Your debt will always follow you and incur more interest, so paying it down little by little is much better than just trying to ignore it.
Out of Control Spending
Spending way more than we should is very easy in today’s modern age where things are more expensive than they’ve ever been. Treating yourself every once in a while is acceptable, but you shouldn’t make a habit of spending frivolously. Instead of spending wildly, set those funds aside so they can go towards a bigger, more important financial goal.
Investing Without Research
Most people think that they need to get into investing because of all the positive stories they’ve heard from friends and co-workers. In reality, if you haven’t done your research and you don’t have the first clue about how to make your investments work for you, you’re probably making one of those bad financial decisions. Investments can potentially make you a whole lot of money, but you don’t want to sink your money in something that you don’t rightly understand.
Can’t Seem to Save
We all have that one friend that forever complains about never being able to save money. It’s true that it has become harder to save in these rough economic times than ever before, but there’s always another way to save: even if it’s not much. You can clip coupons to save on the things you buy the grocery store, you can cut out unnecessary bills like cable and you can save five to ten dollars from each of your paychecks. Watch how quickly those savings start to pile up.
Lavishing in Luxury
To a lot of people out there, appearance is more important than anything else. It’s a given that most people want to look nice, but some of us take it to the extreme. If you’re accustomed to buying luxury and a lot of name brands fill your closet, you’re definitely spending way more than you could be. Cut back on the expensive purchases you buy them on credit and quit making these bad financial decisions!
Think for the Long-Term
Short term goals like paying down a car note or saving for a fun vacation seem to sit at the forefront of our mind, but owning a home and starting a family might be the other kinds of things you want to consider. Time moves so fast, and if you’re not at least considering the long run, you could get caught up in it all.