Few people set out to sabotage their finances, yet many otherwise intelligent men and women do just that! From simple oversights to deliberate actions, these individuals reduce their earning power, damage their careers, and make saving for the future harder than it needs to be.
If you do not want to follow in their footsteps, knowing where they went wrong is a good place to start. Here are five surefire ways to damage your finances, and some ideas for avoiding the dangerous outcomes.
#1 – Ignoring Your Education
Education is directly correlated with everything from higher lifetime earnings to a lower risk of imprisonment. If you shortchange your education, you do so at your peril.
Shortchanging your education goes far beyond finishing high school. Even a couple of college classes can be good for your career and your earning power, even if you do not ultimately get a degree.
#2 – Doing the Minimum at Your Job
You may think you are getting one over on the boss when you land at your desk precisely at starting time and vanish promptly when quitting time arrives. But if that is what you are thinking, you could be in for a rude awakening.
You can be sure that your comings and goings will be noticed, and that could spell trouble when the next promotion becomes available. Even worse, you and your fellow slackers could be first in line when the next round of layoffs are announced.
#3 – Caring What the Neighbors Think
Whether you love your neighbors or hate them, caring too much about what they think could be bad for your psyche – and your finances. Keeping up with the Joneses has never been a financially viable thing to do, and if you do too much of it you could end up in the poorhouse.
So let your neighbors enjoy all those brand new toys and the debt that comes with them. If you stick to your frugal ways, you could be enjoying your first year of retirement while your spendthrift neighbors are still toiling away.
#4 – Sticking With Your Bad Habits
From smoking to drinking to junk food, bad habits can cost you more than your good health. With a single pack of cigarettes pushing $8 and a bottle of booze at least double that, those indulgences could be shortchanging your financial future.
However, you do not have to be teetotaler or kale aficionado to improve your health and your finances. Simply cutting back on those unhealthy habits will give you extra money and possibly some additional years of life!
#5 – Using Shopping as Therapy
Therapy can be good for your mind and your soul, but those therapy sessions should not take place at the local mall. Treating shopping as therapy or a form of relaxation can be dangerous to your finances, so look for other ways to relax and decompress.
This is a great time to pick up yoga or find a new (and free) outdoor activity.
#6 – Not Making Your Money Work for You
The harsh reality is that when your money isn’t invested and working for you, it’s losing buying power. While saving is a great first step towards improving one’s finances, it pales in comparison to the growth you will see with investing.
If investing sounds like a daunting task, remember that you can always start small and increase investment amounts over time depending on your comfort levels.
Sabotaging your financial future is easier than you might think. In fact, you might not even realize you are doing it. If you recognize any of the missteps listed above, it is time to change your ways and improve your financial future.