Most people get lost in their youthfulness and forget to create a substantial financial roadmap that will cushion their future. While the most valuable lessons are those we learn by experience, we can also learn from others and avoid pitfalls. Here are some financial blunders that people can’t get over.
1. Being a Guarantor on Loved One’s Purchases
A member of a popular online forum thinks back and says, “I love my girlfriend, but countersigning for the purchase of her car was my biggest blunder yet.” Being a guarantor means you are financially liable when a buyer can’t keep up with payments.
2. Not Making Immediate Purchases on Great Investments
One financial forum user recalls, “I got the opportunity to buy a piece of land at a great price. I hesitated, but after two years, it sold for double the price. “From this, it’s best to identify great financial opportunities and go for them!
3. Making Meaningless, Extravagant Purchases
Someone who regrets their purchases said, “I spent $600 on a knife I don’t even carry.” I can relate to this statement in all ways! I have made many meaningless purchases that I’ve regretted over the years. It’s never worth it!
4. Allowing a Spouse to Make All Financial Decisions
A couple of forum users admitted to the fact that they thought their partners were financially savvy when they were not. One said that her husband managed all accounts and drove the family to debt. Financing is an important conversation in any partnership; one partner should not take reigns over the other.
5. Maxing Out Credit Cards
Maxing out your credit cards will leave you with more debt than you desire. It dramatically increases your monthly interest rate. If you’re already in debt or having difficulty making ends meet, a maximum payout will put you in a hairy financial situation.
6. Financing Multiple Assets at the Same Time
One at a time is the best way to go! If you’re financing too many assets simultaneously, you may not be able to make sufficient progress. In some cases, you’ll feel burnt out because of the stress associated with making ends meet.
7. Not Saving for Retirement
We hear this one too many times. “Start saving for retirement” is a statement that has gone around more times than we can count. Some online users said this was a financial blunder that still haunts them. They thought they still had many years to start eventual savings. However, time flew by, and they had nothing to fall back on.
8. Spending to Impress Peers
Keeping up with our peers is a financially draining decision. For instance, seeing John driving the latest Bentley would motivate you to buy one. Ultimately, you’ll max out your savings to make this grand purchase. For many, it was a grave blunder as they tried living above their means.
9. Failing to Have a Financial Plan
Making money and having a financial plan are two different things. Some are happy to earn a living, others save money and put it towards long-term investments. Those who didn’t have a financial plan were not able to achieve their goals easily.
10. Getting Too Comfortable With What You Earn
A handful of other forum members said they were too comfortable with what they were making and didn’t feel the need to do more. Ultimately, this was a mistake because they didn’t make bold financial decisions that would have led them to achieve their dreams.
11. Ignoring Insurance
We don’t want any other deductions from our paychecks, so we don’t need to worry about paying for insurance. Right? Wrong! Insurance is helpful in many situations and prevents you from digging into your pockets. Whether it’s your health or home insurance, you’ll always be covered!
12. Not Discussing Finances With Your Partner
The word “team” should apply in all situations with the person you love, and financial discussions are no exception. An expert said, “Not talking to your partner about finances and having a mutual agreement could quickly cause your relationship to crumble. “I couldn’t agree more!
This article was initially published and syndicated by The Cents of Money.