Avoid These 5 Retirement Financial Planning Pitfalls
Making money is tough enough but keeping a little and saving is a whole other matter. Today we talk about 5 common retirement financial planning mistakes to avoid. So you will be able to keep a little more in your pocket for a life you deserve.
“The art is not in making money, but in keeping it.” – Jewish proverb
A solid financial plan takes a little work. And you can do it. Half the battle is to avoid common mistakes and pitfalls that trip most people up. To help you get ahead of the game,today we’ll look 5 common financial planning mistakes so you can recognize them and stay on track while creating enough money to last you into your golden years.
Below are 5 common mistakes to avoid:
1. Not Having a Plan
“A goal without a plan is just a wish.” This is 100% true when it comes to retirement financial planning or lack there of.
Take time to assess your financial health. Look at your debts, even if the situation seems dire. Because you can then fix and address what you acknowledge. Decide how much you want to save, invest, etc. Then you can aim to improve your financial situation gradually.
2. Lack of Financial Literacy
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Don’t let lack of financial awareness stop your retirement financial planning. There are lots of simple books and material online that will help to make up for an education system that fails to provide a financial education.Let’s be honest school raught little to nothing about about taxes, credit cards, and budgeting. Let alone teaching us how to invest as we age and into retirement.
Whatever you think or believe about money, know that you deserve to have a life without struggle. So dump any beliefs you may have about money and wealth and learn to invest wisely and manage your money well.
Good financial literacy will help you now, as well as into retirement and beyond.
3. Procrastination When it Comes to Retirement Financial Planning
The thought of looking at your finances can be daunting. But not looking at them is not going to fix it. Taking charge now will help stop the progression and allow you to start moving towards improving financial wellness.
In fact, it’ll become even more obvious. The bills will become more frequent. The creditors will start calling you. If you ever thought no one cared about you, you’ll now realize just how many people do when you fail to pay your bills on time.
Procrastination will not only affect your financial health but it can spill over into worry resulting in physical and emotional worry. If you find your money worries too much to handle then get help to clear up money issues and reclaim you financial wellness today!
4. Lifestyle Creep Up – Spending More Than You Bring In
Keeping up with Jones’ also known as ‘lifestyle creep’ is a term to describe when you spend more just because you earn more. THis might sound fine but this type of spending can easily catch up. How does it work? Lets say, you may have been on a tight budget before when you were earning a salary of $3,000 a month.
So you find a new job that pays you $4,500 a month. That’s fantastic. You now have $1,500 extra disposable income. However, instead of paying off your debt and saving more, you decide to sell your old car and buy a newer flashier car. After all, you can afford it now.
What happens next is that a sizeable chunk of your extra $1.5k is going towards paying for the new car’s monthly instalments. You’re back on a tight budget… because you’ve taken on new commitments.
Just because you earn more doesn’t mean that you have to spend more. Like the quote at the top of this article said, what matters is not how much you earn. It’s how much you keep.
So, don’t let lifestyle creep throw a spanner in the works and adversely affect your financial planning.
5. Not Building Wealth
Oftentimes we don’t build wealth due to beliefs that we don’t deserve money. So we fail to plan. or we may spend every penny or more than we have. One thing to know is that money is like a magnet so even if you need to start small then do it! Even if you on a salary employee, you should constantly seek out ways to increase your net worth. Start a side business and you may earn even more than your day job.
Like motivational guru, Jim Rohn, used to say, “Profits are better than wages.”
The fastest way to save more is to earn more. The fastest way to retire comfortably is to earn more. The fastest way to pay off debt is to earn more.
Notice a pattern here?
You must do whatever you can to earn more. Then you’ll be able to become debt-free, invest well and retire in comfort.
Remember these 5 retirement financial planning mistakes and avoid them. Besides these tips you’ll also want to:
- Don’t make impulse purchases
- Avoid taking on too much debt
- Invest wisely
- Have adequate health and home insurance
- Set aside an emergency fun
- Decide on a retirement date
Concluding 5 Retirement Financial Planning Mistakes
If you are beating yourself up… stop! As aforementioned we live in a system that fails most of us when it comes to financial planning through life which affects our retirement too.
Take heed of these tips and start a fresh! By reading this article you now know more than most people. Begin taking charge of you financial destiny today!