Financial habits that can destroy your wealth

We all lead increasingly busy lives and taking time out to tackle our financial bad habits can seem tedious; somehow it never quite gets to the top of our ‘to do’ list. However, spending just a comparatively small amount of time thinking about our money, and what we could do differently can help make the future more financially secure.

Being impulsive

We all have our little weaknesses, for some it’s multiple trips to the coffee shop, for others it’s online shopping, visits to the garden centre or match tickets. Whatever life stage you’ve reached, having a budget to work within will help you keep track of what you spend. This can be important at any age, but if you’re saving hard for a deposit for a property, or planning your retirement finances, it’s essential to know where your money goes and how much you can afford to spend.

Not having an emergency fund

Everyone should have cash put by that could cover three to six months of living costs based on their current expense level. If you dip into this fund, remember to build it back up as soon as you can, especially if your cost of living increases over the years. Not comparing costs Expensive debt can end up eroding your wealth very quickly, so it pays to keep loans and mortgages under regular review. Credit cards can also come with high interest charges, so shopping around for good deals really pays. And although it can seem time consuming, it’s important to compare costs for bank accounts, utilities, home insurance, phone and broadband deals too.

Failing to plan

For many younger people, retirement can seem light years away. In many cases, people only think seriously about their later years when they have reached their peak earnings somewhere in their 40s. Defining your goals, short, medium and long-term, will help you get a feel for how much you should be saving in your early years to make adequate provision for your future. Even small sums saved regularly can make a big difference to your financial future.

Not keeping track of investments

It pays to review your savings and investments from time to time. That way, you won’t expose your money to unnecessary risks. Weeding out poorly-performing holdings, and rebalancing the mix of assets that you hold will help to keep your portfolio healthy.

If you’re making plans for your retirement and would like some professional advice, then please get in touch.