10 Financial Choices You’ll Regret in 10 Years
The earlier you start building strong finances, the better off your life will be. Unfortunately, many of us don’t recognize the importance of focusing on our finances until much later in life. No matter where you are in your financial journey it’s not too late to start giving more attention to your financial health. Read on to find out ten of the top financial regrets and get advice on how you can avoid this regret, too.
Not Setting Enough Money Aside for Goals
It’s pretty tough to reach goals if you haven’t set any. If you don’t set a goal to have $20,000 in savings in 10 years, for example, you can’t be upset when you don’t have $20,000 in savings in 10 years.
At every stage in life, you should have both short and long-term financial goals that you’re working toward. These goals not only ensure that you’re prepared for your present expenses, but also set a foundation for the future as well.
Not Learning Enough About Personal Finance
Personal finance isn’t taught in school, so each person has to take responsibility for learning the essential personal finance concepts on their own. Having strong finances is key for a comfortable life. Enjoying life doesn’t necessarily require you to have a lot of money, but it does require you to make the most with the money you have.
Spend some time learning as much as you can about personal finance. Budgeting, money management, saving, credit, and retirement are some of the basics that everyone should know regardless of their long-term financial goals.
Not Putting Enough Money Away
It may be difficult to consistently put money into a savings account each month, but if you don’t make the sacrifice, you’ll regret it 10 years from now. You should be putting money into an emergency as well as a retirement fund. If you have children, you should also set something aside each month for their college fund.
People tend to be optimistic about the future, which leads them to expect that it will be easier to save when the time comes. Unfortunately, our expectations don’t always become reality, which is why it’s best to start saving as early as possible.
Creating Too Much Debt
You don’t often realize how much debt you’re actually creating when you’re using your credit cards and taking out loans. However, if you don’t keep your debt habits under control, you will find yourself one day in tens of thousands of dollars of debt that you have to figure out how to pay off. Ten years from now, your financial goals and priorities will likely have changed dramatically from what they are now. You don’t want to be unable to focus on building for the future because you have to take care of the debts you created in the past.
Not Planning for Retirement
Retirement planning may sound like something you’re not supposed to do until you’re in your 50s or 60s, but if you wait that long, it’s likely you will regret it. The longer you put off retirement planning, the harder it’s going to be to actually retire.
Start planning early so you have more time to prepare for the lifestyle you want to have when you retire. Getting a late start limits your options and may even force you to keep working longer than you really would like to. If you haven’t already started saving for retirement, don’t wait any longer.
Only Paying the Minimum on Credit Cards
Paying the minimum feels comfortable and it’s all your credit card issuer requires, so many people take advantage of the option. However, when you pay only the minimum, it can take several years to actually pay off your credit card balance. That’s because a large portion of your monthly payment will go toward interest and your balance will go down by a small amount each month.
Can you imagine still paying off a credit card ten years from now? If you’re paying the minimum on your credit cards, that could be a reality. Get rid of your credit card debt faster by making larger monthly payments.
Not Having Adequate Health Insurance
Americans are carrying a record amount of credit card and student loan debt. However, despite this high amount of consumer debt, medical bills are actually one of the leading causes of bankruptcy in the United States. Having the right health insurance coverage is an important step to being able to cover medical expenses.
You can’t assume that you won’t need health insurance simply because you’re healthy at this exact moment. Things could change in the blink of an eye and you want to be as prepared as possible for whatever changes you might face.
Co Signing For Someone
When a loved one needs you to cosign for them, their need can tug on your heartstrings. Whether it’s a child who needs to you to cosign their first credit card or a sibling who needs you to cosign an apartment for them, too much can go wrong with a co signing agreement.
If you cosign for someone, you’re not just putting your signature on a dotted line–you’re actually agreeing to be held liable for the debt if the other person can’t afford to make their payments. Missed payments on a cosigned loan affect you just as much as they affect the other borrower. If the borrower files bankruptcy and includes the cosigned account, it goes on your credit report, too.
Saying “no” to co signing may feel wrong, but it’s best to avoid major regret down the road.
Not Getting Your College Degree
While a college degree isn’t a requirement for success, you’re more likely to succeed if you have a college degree. Statistics show that the unemployment rates are high and wages are low for workers who do not have a college degree. In addition, those with the highest degrees are the least likely to be unemployed.
Not Spending Money on What Makes You Happy
We have several financial responsibilities to take care of, but if you only spend money on your responsibilities and not on the things that make you happy, you may end up regretting it. Of course, you must find a balance between spending on fun things and spending on the necessities of life. Just be sure to spend a little money on enjoyment every once in awhile.
While you can begin taking steps toward financial success at any point, it’s best to do it early and completely avoid the potential for regrets.