Mistakes are part of life, might as well accept that. I’m learning to accept that concept more as I get older. When it comes to personal finance in particular hopefully our money management mishaps are smaller and infrequent over time. For today’s post, here are four fat financial failures and some personal commentary on them that have the potential to derail any retirement plan.
The simple fact is, unless you can control your spending you won’t have anything left over to save or invest. So, when it comes to a healthy financial future here is the most basic financial truth: spend less than you make. In my 20s I didn’t follow this rule as well as I should have – I spent a ton of cash. Throughout my 30s I feel I’ve made up for some lost time. A good budget that works for you is an enabler.
Too much house
Most big fat houses often come with big fat mortgages. Beyond the debt repayment, you’ve got to consider utility costs for your home, maintenance and upkeep expenses for your home to retain its value. A home can be a good investment after all; an appreciating asset. The bigger the house the bigger the obligations, so consider what you really need in a home versus what you really want. This might help you avoid buying too much house. Admittedly, we owe a considerable mortgage on our house but we’re trying to kill this debt in 8 years or less.
You do not have all the time in the world to save for retirement. The earlier you start saving for retirement the less money you need to save when compared to saving later in life. Consider an 18-hole round of golf as a loose analogy: the front nine holes are your asset accumulation years and the back nine holes are your spending years. You only have so much time to save for retirement before drawing upon the assets. Our financial plan includes saving early and often while enjoying our health today and the great things life has to offer. With some practice, patience and following some good financial fundamentals – just like your golf game – that work should add up to a respectable scorecard.
Your attitude sucks
Having money is not my goal in life. I simply want to have some money to make more choices in my life. My attitude regarding money is rather simple: it’s a tool that provides choice. Every week on this blog, I’m trying to keep the good habits that are driving us forward while learning valuable lessons from our financial screw-ups. I think having an honest, open and positive attitude about money is healthy and and it’s one of the main reasons why I will continue to blog about it. If your attitude about money sucks don’t be surprised if your financial future follows suit.
Overspending, too much house, believing too much time is on your side and having a poor attitude about money can have crippling effects on your financial future. These are just four big fat financial failures I’ve shared today and I know there are more.
What big fat financial failures would you add to my list?