When planning your financial future and well-being, it is incumbent upon you to make sure that you do everything to make sure it all works. I am not saying that you can prevent every eventuality and make a full proof plan but avoiding common financial pitfalls will ensure that you have the potential for the most success in planning your finances. Take a look at this list of common pitfalls and see if there is anything that you need to address in your current plan or anticipate in your future plans.
- Not Planning Ahead
One of the hardest parts of planning is looking far enough ahead. Often we sabotage ourselves by neglecting vision and seeing only the immediate and not the future. Not looking far enough ahead will only cause us not to create as foolproof a scenario as we need to weather the storms.
- Not Knowing What You Have
Say, we have done our homework and started a financial fortress—acquiring products and protection to make sure that security down the road is achieved. Yet over the years, we start to forget what we have and why we have it in the first place. Forgetting what we have is tantamount to never having it in the first place. It is essential to our success to understand how everything works together to achieve the desired results.
- Budget? What Budget?
Living without a budget will only increase the likelihood of overspending and lack of saving. Both of these will only lead to a disaster now or further down the road.
- Not Saving
I always say that saving something is better than saving nothing. Often I hear that individuals will begin to save when they get the debt paid down, start to earn more money or when it feels right. The problem is that there is never a right time. You will never feel comfortable so start to save sooner rather than later. I promise you that saving something is better than having an empty coffer when you most need it.
- Refusing to Change
Changing is not always a bad thing. Oftentimes making decisions to change that are based on realizing that if you do not that your situation may drastically change for the worst can be a huge pitfall. I never recommend constant changes but correcting your plan to fit with your current circumstances may be the right move sometimes. Just make sure that you take some time to review your situation regularly to ensure that you know all your options. Then, and only then, will you have enough information to make sure that you know why you are correcting and what will happen if you do.
- Check Your Credit
In these times; everyone wants to know what your credit is, from landlords to mortgage companies to employers. You never know when someone may ask you to see your credit. Decisions can be made specifically because of your credit, so knowing what is there and what your score is will determine the outcome of many situations. Bad credit equates to hearing a “no” when what you need is to hear a “yes.” Make sure you are checking your credit report at least once a year to ensure that it is where you need it to be.