5 Habits That Will Inevitably Sabotage Your Finances

5 Habits That Will Inevitably Sabotage Your Finances

stop sign with the word "spending" written under itBefore making those little purchases throughout the day that add to big spending, just consider what you’ll need to have a decent retirement or for that African safari or the beach house you’ve always wanted. And before you discount this tip, remember: Entire industries thrive by selling low-cost goods. Don’t let these little expenses sneak up on you and destroy your long-term financial goals. For tips on healthy, cost-saving snacks visit EatingWell.com.

Purchasing a New Car Every Several Years
There are worse things than forking over $20,000 every few years. But not many. Did you know that driving an older car can save you so much money it can make your head spin? Five to 10-year-old cars have depreciated significantly and are safe enough to represent tremendous value in your life – especially to your finances. New cars, like hybrids and electric vehicles, aren’t quite as cost efficient as they might seem because they’re battery-reliant, and the batteries have to be replaced every few years. If the battery isn’t replaced, you might end up spending more than you’d save from not having to purchase gasoline.

Plus, newer cars cost significantly more to insure than older models and, more than likely, you’ll give in to the temptation to raise your comprehensive and collision coverage – and those coverages cost a pretty penny. The next time you try to convince yourself that you “need” a new car because of modern efficiencies, first do your math. And before you purchase your next car, visit FuelEconomy.gov.

Not Having a Financial Plan and Just Hoping for the Best
When it comes to financial planning, don’t wing it. How much you need to save depends on your current financial status and future plans and goals. Calculate how much money you think you’ll need for retirement adjusted for inflation. Take a look at the financial picture of various investments from now until you retire and beyond. Take a hard, realistic look at all your major expenses, current and upcoming. The list may seem to go on to infinity. True, you can drive yourself crazy accounting for every little data point in the process. But it’s certainly worth some time and exploration. After all, you don’t want to retire only to realize five years later you blew it by quitting your job.

Meet with a financial adviser who can help you create a financial plan that goes beyond investing to offer an in-depth picture of your financial landscape. It’s also worth your time to understand how financial advisers get paid. They need to demonstrate their value to you before you sign on the dotted line. Hire a professional, educate yourself, and make a plan.

By overcoming these bad financial habits, you’ll find yourself enjoying a healthier bank account and more time to do the things you want to do in life. Let your money work for you.