It’s easy for us to complete an entire list of best financial practices for our clients to follow. However, sometimes it’s just as helpful to make our clients aware of the important don’ts when it comes to financial habits.
Don’t wing it.
We hear people say things all the time regarding their day-to-day financial decisions.
“I’ll just try to spend less.”
“Making a budget stresses me out, so I don’t think I need one.”
“I don’t know how much I spend month-to-month.”
It’s important to obtain a full grasp on your spending habits if you’re going to achieve big financial goals. We say start with an app or a spreadsheet that will help you decipher where your spending habits are now and where they should be.
Don’t live above your means.
Of course, it sounds nice to have a luxury car, the biggest baddest TVs, the newest cell phones on the block, and other purchases that are top of the line. However, that lifestyle does not fit within everyone’s budget. Keeping up with the Joneses is a tough game that no one can win. It’s important to know what you can afford and where you’re willing to take on a little extra debt. Remember, interest rates are very real. You may end up paying far more than you planned if you aren’t careful.
Don’t drain your savings.
Of course, you should set goals for your personal savings, but it’s important to factor in emergencies. Say you’re saving to buy a car for $4,000. Once your savings hit that lucky number, you should keep going. It’s not smart to drain your savings to $0 should something like a medical emergency or job loss come about.
Don’t take bad advice.
We always suggest seeking the help of financial professionals, but if you’re taking financial advice from peers or friends, ensure your financial values align. Not everyone spends and saves the same. Do research, ask questions, and don’t be afraid to seek help when you need it.