Taking control of your finances is one of the most important and empowering things you can do for yourself so you have to fully concentrate on it.
With the many strategies you have to grow your wealth year-on-year, this 2018, take the time to revisit your money habits that could be sabotaging your financial health.
We have compiled the most critical money mistakes to avoid this 2018 to help you get to your next financial milestone faster:
- Cut Out Credit Card Debt
Habitual reliance on credit cards for impulsive purchases will accumulate interest that can blow-up before you know it. You are technically wasting money that could be allocated to other platforms for your financial growth.
Stop thinking that it’s okay to pay the monthly minimum amount due because this isn’t a sustainable practice. Instead, be liberated from debts by completely paying-off all of it as early as possible this year, so have more time to focus on your financial goals.
- Failing to Set an Aside Emergency Fund
It’s shocking to know that a total of 57 million Americans have no emergency savings despite the importance and urgency of having one.
A rainy-day fund is crucial in a one’s life – regardless of status and age – as it gives you peace of mind in any circumstance. When a rainy day comes, you have a breathing space for unforeseen expenses and you won’t have to succumb to debts.
- Unwilling to Invest in Stocks
Many people are hesitant to explore the stock market simply because they are uncomfortable with the idea of market declines and this is surely one of the money mistakes to avoid this 2018.
Know that while there are periodic market declines, the stock market has historically proved its capability to recover and reach new highs in due time. Wise investors train their minds to focus on potential huge returns and not on episodic instabilities which will eventually pass.
- Not Sticking Within Your Budget
We might not notice it, but we are prone to overspending which is one of the money mistakes to avoid this 2018. For instance, when you step out of the grocery, you end up buying too many things that weren’t even part of your list, or when you go online and see an item on sale, you check-out immediately. If you constantly practice misuse of funds, you will never stay within a budget.
Follow a smart (and pretty doable) financial plan to stop you from going overboard. The 50-30-20 rule is one of the easiest and most effective method in maximizing your income. Set aside the 50% for daily living expenses (or your non-negotiables like rent). Use the other 30% wisely for the things you want to buy for yourself. Lastly, the 20% should automatically be allocated for your investments. (You also have the option to automate the 20% of your income so you don’t have to think about it anymore.)
- Not Customizing Investment Strategies
Since there are many ways on how you could grow your wealth, there’s also a tendency to follow through on what’s trending or what’s more popular when it comes to investments.
One of the many money mistakes to avoid this 2018 is not realizing that there’s no specific template for investing. Take note that it’s actually personalized depending on your needs, goals, priorities, and background. There might be similarities but at the end of the day, it should be tailored to your benefit.
Consulting with a financial expert is highly advisable in the process of coming up with strategies that will suit your overall needs.
- Neglecting Retirement Preparations
The question is – what’s hindering you in preparing for your own retirement? You cannot rely on anyone to do it for you so why not face the reality?
We will all reach the retirement phase. It compels us to work hard to achieve both present and future successes. Living in the ‘now’ could make you contented but being able to build your financial freedom for your future is a gift that you owe yourself.
Opening an IRA account today (if you haven’t yet) is a move that even billionaires deem as extremely crucial. If you are still confused on how to go about it, I suggest you discuss it with a trusted financial advisor for you to know you can fully benefit from it.
Do you have any other tips to add to the list? We’d love to hear from you!
Want to learn more about investing? Check out Founder Elle Kaplan’s firm LexION Capital.
