It’s natural to earn more as your career progresses. Of course, that’s often when your living expenses and family responsibilities also increase. All in all, there are lots of ways to tread water and avoid ever meeting your financial goals. Here are 11 things not to do as you work toward your goals:
No matter how much or how little you make, spending it all means you’ll never get ahead. But believe it or not, if you get used to saving part of every paycheck, you won’t even notice it’s gone. Before long you could have thousands in the bank—and you’ll probably be surprised at how easy it was to save.
Who needs to save for emergencies when there are credit cards? Actually, everyone does. Say your car’s transmission dies, and the repairs will cost $1,200. Putting that on your credit card could cost you big bucks in interest and fees. (And if you’ve had trouble with credit card debt in the past, the temptation to run up your balance again might prove too strong for you.) On the other hand, setting money aside in an interest-bearing savings account can pay you money and give you peace of mind. (Learn more about the ins and outs of emergency funds.)
You’ve got to dress for success, right? But how much is enough? There’s always someone richer, flashier, and better dressed. Instead of giving up your financial health for fashion’s sake, put your efforts into dressing well for less.
Hey, it’s just a little plastic toy for your toddler. But by the time they’re teenagers, they’ll “need” big-time budget-busters like cell phones, video game consoles, and $100 sneakers. Set them on the right track when they’re young with an allowance and some well-planned money lessons.
Think you can’t afford to save for the future? You’re not alone. But chances are, you’re frittering away money that could actually add up to a good-sized nest egg. You’ve already got what it takes to become a saver: creativity, willpower, and a sense of humor. Set a small goal to start (say, $10 a week), and increase it as you become more savings-savvy.
It’s years away, and there’s just too much going on right now. Then again, if retirement is weighing on your mind, why not do yourself a favor and do something about it? Increase your 401(k) contributions starting this week. Work on one smart money habit each month, and set aside your new-found surplus. It’s never too late to save for retirement—and there are lots of ways to do it.
Why pay premiums on something you might never use? The thing about insurance is that once you need it, it’s probably too late.
Take care of your family. Consider disability insurance to replace your income if you should get injured and not be able to work. Life insurance can also help—especially if you have dependent children to look out for. While you’re at it, make sure your home insurance and auto insurance are up-to-date.
You work hard, and you deserve to treat yourself. Budgets are a pain, anyway. Then again, don’t you also deserve worry-free nights, less stress in your life, and a comfortable retirement? A spending plan that fits your life can give you all of those without making you miserable. It just takes some practice.
The monthly bill isn’t that much—and the interest is only 15 percent. But just think of how great it would feel to feed that money into your savings account or retirement account each month, instead of paying off stuff you might not even like or use anymore.
The fact is, there may always be a reason to run up your credit card balance. It’s up to you to rein in your spending, think ahead, and put your money to work for you.
You’ve got a savings account that pays interest. Over time, the interest can probably keep up with inflation—but just barely. That means your money might not actually grow. A financial professional can help you find investments that are just right for your goals and style.
You get a raise every year, so why not spend it? Here’s another idea: Every time you get a raise, save the difference between your old and new paycheck amounts. It’s easy with automatic transfers. Once you figure out how much extra you’ll receive each payday, set a recurring transfer that withdraws that amount from your checking and deposits it into your savings. Because you aren’t used to living on the money, you’ll never miss it. And before long, you’ll be on your way toward the financial goals you care so much about.