7 Financial Choices You Are Making That You Will Definitely Regret In 10 Years

Many of us struggle with the urge to seek perfection in various aspects of our lives.

Who doesn’t want to have the best career in a profession you are passionate about or achieve a perfect state of work-life balance?

The problem with this search is that perfection itself can be elusive and is often just an illusion created in our minds.

Even the best laid plans frequently go awry but that shouldn’t stop us from planning. In fact, a solid financial plan is capable of incorporating as many of life’s “what ifs” as possible and adapts to change.

Must Read >>> 4 Ways To Make Ends Meet and Survive on Sh 30,000 Monthly Salary

Here are a few examples of financial choices that you could spend decades trying to recover from:

1. Trying to float on through life without a budget

Having a personal spending plan provides awareness of where our money is going and helps us prioritize financial decisions.

Budgeting is not just for those struggling to make ends meet. Everyone needs a personal spending plan and your plan needs to be more than just a loosely defined set of good intentions – your plan should always be written down.

Fortunately, these spending plans do not need to be perfect or overly complex. Your budget can be as simple or complicated as you want it to be. Remember to try and make saving, paying bills, and paying off debt automatic.

2. Using credit cards to pay for wants and needs

Debt becomes a major obstacle on the path to important goals like retirement. Credit card balances can pile up in a hurry and stress will continue to increase with that debt.

If you routinely carry a balance on your credit card balances these lifestyle choices could end up costing hundreds if not thousands of shillings over time.

3. Falling for the newer, bigger, better trap

Every single day we are inundated with marketing messages and subtle hints that we deserve the next “big” thing.

Whether it is a new car, real estate, technology gadget, dream vacation, wedding or home improvement project, it is easy to fall into the trap.

Buying a new car that you cannot afford is a common problem that plagues households throughout the land of the free.

To avoid falling into this trap you can go ahead and work any potential major purchases into your spending plan.

4. Not doing enough to protect your wealth

When it comes to insurance planning, we usually start with protecting our cars, homes, and personal assets.

That normally doesn’t go far enough as many people lack to invest in a policy that covers any potential liabilities that exceed your regular coverage amounts.

Regardless of age or whether or not you are married or have kids, ensure you have adequate life insurance coverage by running a basic analysis at least once every 2-3 years.

5. Thinking retirement planning is just for old people (or it’s too late to plan)

Waiting too late to begin saving for retirement is a big mistake.

It is often difficult to begin our careers with the end in mind, especially when life is throwing us countless challenges at us that complicate how we manage our day-to-day finances.

So maybe it’s time to re-frame the discussion and call it what it really is – Financial Independence Day.

6. Not paying attention to fees on financial products

The financial services industry hasn’t always been as transparent as necessary regarding the true costs of investment and insurance products.

In fact, most people aren’t even aware how different financial professionals are compensated or what the term fiduciary means.

Financial advisors can be an important source of knowledge and guidance in the wealth building process.

7. Financial avoidance

If you want to align your most important life goals with your money and other resources you have to pay attention.

You don’t have to be a financial genius you just need to take action and do something. For couples, financial avoidance has potentially devastating consequences such as money arguments and stress.

If you have a financial partner, you can talk about your financial goals during regular money talks.

Find Out >>> 5 Ways to Live Within Your Means and Make Your Salary Work for You

As you can see, there are many financial decisions capable of getting our retirement plans off track and hurting our chances of achieving other important life goals.

A written financial plan is a helpful tool to help you avoid the big mistake

Source: The Balance