We all know at least one retiree who says, “If I could do it all over again, I’d do things a lot differently”. Everyone makes mistakes, of course, but we hope to avoid some of the bigger ones that lead to financial regrets.
Since we should always strive to learn from one another’s mistakes, take care to avoid these common financial blunders.
Forgetting to look at your pay stubs. If your paychecks are automatically deposited into your checking account, it can be easy to overlook your pay stubs. But you really need to keep an eye on all of your deductions, to be certain your taxes, retirement account, charitable donations, insurance, and other items are being charged correctly.
Neglecting to perform preventive care. For everything from your home to your car and even your body, preventive care can help you avoid thousands in repair and medical bills. Take care of your most important assets, using a calendar or other reminder system if necessary.
Failing to plan for the unexpected. We can’t always predict everything in life, but we can prepare for a variety of circumstances by utilizing a savings account. Strive to set aside some liquid resources so that an emergency doesn’t have you reaching for a (high interest) credit card.
Ignoring your credit report. Everyone should check their credit report regularly (at least annually). If you see anything you believe is incorrect, take the proper steps to contest it. If you aren’t checking, identity theft or just plain old recording mistakes could do serious damage to your score over the long term.
Too many credit cards. We’ve all been tempted to sign up for store credit cards in order to take advantage of discounts. But in the long run, using store cards can cost you more in high interest. Plus, the more cards you hold, the more likely you are to forget a payment and incur late penalties.
Ignoring matching funds for retirement. If your employer offers matching funds for retirement contributions, make sure you at least take advantage of the full match amount. That’s an annual opportunity that you’d be turning down, and you can’t go back in time and change your mind.
Competing with the Joneses. We all deserve a treat once in a while, but remind yourself of your long term priorities when tempted to spend. If you upgrade your lifestyle every time you get a raise, you could be costing yourself valuable opportunities to better prepare for the future.
Failing to budget. Even for those who are relatively financially comfortable, budgets serve an important purpose. We should all know where our hard-earned money is going each month, identify our priorities, and make a plan to make the best use of our assets.
And of course, we do recommend that you work closely with a financial planner over time. Meet with us regularly so that we can review both your short- and long-term financial plans, and help you make adjustments along the way.