Although the worlds of business and finance bore me immensely, I am aware that I need to understand basic money principles in order to be successful in this world. I am also aware that maintaining bad money habits can preclude me from living fully and freely. With that thought in mind, I think it is important to identify and avoid bad money habits that can preclude me from leading the type of productive and powerful life that I desire. If you are also interested in ensuring that you have a great financial future, you should make sure to avoid these three bad money habits:
1. Saving For College Instead Of Retirement.
Setting money aside for your child’s higher education is definitely a prudent decision. However, if you choose to invest in your child’s college education instead of developing your retirement savings, it will take time and energy for you to make up for it later. In discussing bad money habits, financial planner Wendy Weaver notes that a lot of families make great sacrifices to put their children through school. Nevertheless, there are a variety of ways that school can be paid for-such as scholarships and loans-that can not be used to contribute towards your retirement. With that thought in mind, it may be advisable to place at least 10% of your income into retirement savings before putting any of it towards a college education.
2. Letting Your Partner Or Spouse Make All The Money Decisions.
While you may have great confidence in your partner’s ability to manage money, this does not mean that she or he should be responsible for everything. And although this principle applies to both sexes, it is women who are the least likely to handle big picture items like debt payments, taxes, and investments and thus subject themselves to financial frailty. Irrespective of your gender, you should recognize that while you love your partner or spouse, you may not always approve of the money decisions they’re making. With that thought in mind, make it a point to be aware of both day-to-day budgeting and big picture financial decisions that are being made if you and your partner have a joint account.
3. Not Purchasing Disability Insurance.
In discussing bad money habits, financial planner Claire Emory notes that the likelihood of you becoming disabled exceeds that of you dying before retirement. With that idea in mind, it would be prudent for you to purchase disability coverage through your employer if you are able to do so, especially since it’ll cost less than the insurance offered on the individual market. It may even be free. If you can’t get a policy through your employer, try attaining one through any professional associations you’re affiliated with.
If you are interested in becoming financially secure, you should think critically about whether you are engaging in any bad money habits that preclude you from walking in the freedom that you desire. In examining the information above, determine whether or not any of the listed behaviors apply to you and make the necessary adjustments in action and attitude so that you can live freely and fully. Good luck! :)
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