Have you wondered if some of your spending decisions are holding you back from achieving financial freedom? You’re not alone. Many people find themselves falling into five not-so-productive money habits that make it more difficult to allow their hard-earned money to grow for “future them”. Do any of these habits look familiar to you? How can you break your bad money habits? Keep reading to learn more.
Spending more than you earn/impulse shopping
In our social media-driven world, it is easier than ever to view (and be influenced by) others and even easier to feel financial pressures to keep up with friends and family. Have you ever purchased something because someone else had it first? Ever see an ad on social media that caught you at just the wrong, vulnerable moment? According to a recent LendingTree survey of nearly 1,600 U.S. consumers, almost 40 percent of Americans have overspent to impress someone else, especially on clothes, shoes or accessories. And 27 percent of those who overspent to impress others are currently in debt.2 This habit doesn’t seem like much in the moment, but it is a path toward significant debt if not managed properly.
Not building an emergency fund
We’re not in the business of making guarantees (in fact, we are prohibited from making them!). But here’s something you can take to the bank – LIFE happens. And it usually happens at the very worst time. Building an emergency fund doesn’t sound as exciting as a tropical vacation. But you know what sounds even less exciting? Going into debt because of an unexpected emergency, which pushes that tropical vacation even further down your priority list. By building an emergency fund, you can potentially protect you and your family when those unexpected LIFE expenses happen.
Living without a budget
There was a time when students were required to learn how to create a household budget, balance a checkbook and manage family expenses. While schools may no longer teach those fundamental skills, knowing how to create and stick to a budget remains a crucial part of any family’s financial planning success. Creating a budget will not only help you better plan for your current and long-term financial goals based on your ongoing expenses, but it can also give you clarity and peace of mind knowing that your income and expenses are aligned. For more insight, check out Investopedia’s 5 purposes of budgeting.
Just 32 percent of U.S. households prepare a monthly budget1! One of our organization’s core values is to improve financial literacy for all, which is why we would like to offer you our free budgeting worksheet. Download your free budgeting worksheet now! Speaking of financial literacy…
Inadequate financial literacy
Although most people don’t find reading market run downs very exciting, it’s important to familiarize yourself with and understand what’s happening with the markets to better prepare for how current events may impact your personal financial wellness. If reading deep-dive market commentary doesn’t interest you, sign up for one of our free monthly webinars, which are intended to help the everyday consumer understand basic financial topics.
Not contributing to your retirement plans
If you aren’t currently taking full advantage of your 401(k), you are missing out on a key job benefit that can significantly boost your retirement savings over the long run.
If you struggle with saving and want to improve your overall financial outlook, we challenge you to look at your spending habits and consider making some small adjustments that could potentially have a great impact on your financial future. Here is a free resources that may provide additional insight into this topic.
We do this kind of work with our clients because we believe every investor deserves to realize their life’s ambitions. Have questions or interested in speaking with a financial advisor? Call today for more information at 800.493.6226.
Advisory products and services offered by Investment Adviser Representatives through Prime Capital Investment Advisors, LLC (“PCIA”), a federally registered investment adviser. PCIA: 6201 College Blvd., Suite#150, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”). Securities offered by Registered Representatives through Private Client Services, Member FINRA/SIPC. PCIA and Private Client Services are separate entities and are not affiliated.
Footnotes
2 https://www.lendingtree.com/debt-consolidation/overspending-to-impress-survey/
