The topic of finance is heard by many but understood by only a few. At some point in life, everyone goes through the stage of financial stability, characterized by low debt and a decent income. The choices you make at that point can define your life, whether it would be spent in regret or pleasure. In this article, we would be discussing 5 financial choices you’ll regret if you make the wrong choice.
Are you going to be financially free? Be in ruins? Or maintain your average lifestyle? This is totally up to you to decide. Here are some wrong choices that you would regret and should, therefore, look out for.
5 financial choices you’ll regret
1. Spending money on the wrong things and for the wrong reasons
This is arguable the most common practice amongst poor finance managers. It is characterized by lavish and impulsive spending. Emotions and greed rule people in this category. You become selfish to yourself because your lavish spending comes back to hunt only you. Do not buy things to impress others or things that you cannot conveniently afford. For example, purchasing that new car with a plan to pay up for the next 2 years is a terrible idea. Redefine your goals, and make decisions that would leave you happier in the future, instead of being in debt for the next few years, except it is an asset that would bring in income.
2. Falling victim of too good to be true traps
Every day, there seems to be that new opportunity to make millions by investing a few thousands. The truth is that these schemes are not new, scammers keep spinning off old tricks that ignorant people fall for. If anyone had the secret to make millions by investing a few thousand, they wouldn’t share it with anyone, at any cost. Even stockbrokers with all the tips can’t 100% predict how the market would turn out.
The truth about these schemes remains that only a few early birds benefit from the ignorance and greed of many. Focus, instead, on legitimate investments like real estate, bonds, treasury bills, and the stock market. Investing in Ponzi schemes is something you would surely regret.
3. Failing to plan for your retirement
Regardless of your present age, retirement is going to catch up eventually. How sudden it does depends on you. You can sleep at age 23 and wake up at 59, with retirement on the horizon. This is so because you failed to plan for it, and cannot account for the 36 years in-between. Having inadequate or no plan for retirement will bring you regret, especially if your pension funds is not enough to cover the rest of your life or too little to meet your expenses. You can earn millions during your active years, and have nothing to show for it after retirement. This is why it is essential to take your retirement seriously. It could well determine the nature of your last days.
4. Lack of financial goals and emergency funds
No one ever stumbles on financial freedom. It stems from a properly planned life and strategic decisions. Lacking financial goals presently may not look like a bad thing because the paycheck keeps coming in at the end of the month. However, in the long term, you would regret it, especially if something stops that paycheck from coming in at month-end. It is also expedient that you have an emergency fund saved up for emergency reasons only. This fund would be used to save your skin in times of trouble and get you out of tight situations.
5. Contradicting financial views with your spouse
Your spouse can become your greatest headache if your views on finance do not align with theirs. You cannot plan or save when you have a spouse who does not understand your goals or who disagrees with them. This is why it is important to talk it through, and see a consultant if necessary. Living life with a spouse with opposite financial views to yours is something you would regret because it leads to only one end, frustration.
However you spin it, financial choices are made by you, and even if you claim they aren’t, you alone will bear the consequences. Take charge of your financial life today, draw up a good financial plan, make the right choices, and you can live a life with few regrets and many benefits.