A lot of people who worry about their financial decisions often frame that worry on how it will impact them in the present, and often forget that the decisions will likely have consequences in the future as well. While financial situations can always change, it can pay off handsomely if you think long-term rather than just short-term. Below you’ll find a number of common financial choices many end up regretting somewhere down the line:
Not Saving for Retirement
Many people don’t even think twice about saving for retirement. Whether you believe retirement is too far in the future to worry about or that you don’t have enough money to sock away into a 401K or IRA, this is a mindset you need to change. You should always contribute to a retirement savings, even if it’s even a small amount. Retirement will come before you know it and you don’t want to be left scrambling for money to keep yourself afloat once you’re unable to work.
Not Having an Emergency Fund
You might be surprised by how many people don’t save money for unexpected emergencies. Many of us will experience some type of emergency in our lifetime, whether it’s losing a job, having a health issue, or having to quickly repair house or car damage. Having some money set aside for unexpected emergencies is something you definitely need to do, and you’ll be mad at yourself for not doing so when the time comes that you need it.
Not Paying Down Debt
Accumulating, but not paying down, debt is something that will haunt you well into the future. While many people believe it’s difficult to pay off debt, it’s something you need to steadily work toward. Avoiding paying off debt will only make more trouble down the line, and it’s something you should take care of as soon as possible.
A lot of us are guilty of spending frivolously every so often, and while spending frivolously can be a nice treat on occasion, it’s not something that should be a habit. If you’re an impulsive shopper or have a habit of throwing away money, you need to learn to reign yourself in. There are better things you could be doing with your money and you don’t want ten years to pass and find yourself mourning all the money you wasted on items you don’t even remember.
Investing In Things You Don’t Understand
Some people feel pressured to invest in items because they have people telling them that their hard earned money is better off invested in the stock market or certain assets. While investments can be a great way to use your money, you should never invest in something you don’t completely understand. It’s not only a poor use of your money, but it’ll likely end up bringing you a major headache and regret.
Inability to Save Money
How often have you heard a friend say they’re just incapable of saving money? Or maybe you’re that person bemoaning your inability to save. Whatever the case may be, there is almost always a way to save money. Getting into the habit of saving a portion of your paycheck each month is easier than you may think. Never saving money or excusing away your lack of savings by bad habits will cause you a lot of grief ten years from now when you realize you have nothing put aside.
Not Thinking You Need to Save
A lot of people are also guilty of not believing they need to save money. Sometimes they believe they’re still young and healthy enough that medical bills or retirement isn’t an issue. Sometimes people believe they don’t need to save because there’s nothing they need to buy. This is a dangerous mindset because it’ll only end up leaving you without any savings or emergency fund in the future. You should always start saving money, even when you don’t think you have anything worth saving for.
Going Into Debt For Something You Don’t Truly Need
Sometimes we need to accrue debt for certain major life purchases such as college or a mortgage. However, you should never go into debt for a major purchase that you don’t actually need. For instance, buying that luxury car may seem like a great idea at the time, but will you still think so ten years from now when you’re still trying to pay it off?
Not Thinking Long-Term
One of the major issues people face with their finances is not thinking about the long term. Short term goals, such as paying off a car or paying down debt or saving up for a special trip, are great, but you also need to think about how your current financial situation will impact you in the future.
Not Indulging Every Once in Awhile
While many people regret not saving enough or spending too frivolously, it’s also important to spend your money on things that are important to you instead of hoarding it. We all need to indulge every once in awhile and while being frugal is great, you don’t want to miss out on rare experiences that will last you a lifetime just to save a little more than you are.