Updated: March 26, 2020
Do you like living in the present moment? Nothing wrong with doing that, but it’s important to realize that one cannot just live in the present moment because the future will come sooner than you think.
And when that time comes, you might have passed over and wasted financial opportunities that could have made your life easier and more comfortable during retirement.
Such are the realizations that our article contributor shares with us today.
Retirement means no stress, no pressure, and no worries. It depicts bliss, fun and freedom – but not when you’re in a bad financial situation.
A bad financial situation is the consequence of decisions made in the past. There are financial decisions that seem to be okay at the moment, but may hurt in the long run – worse is when there’s just no way to get out of it.
Nonetheless, we all learn from mistakes, don’t we?
So before you hit retirement age, avoid and learn from these seven common financial mistakes that most retired people say they regret.
1. I regret overspending
Too much of anything is never okay, and especially when it comes to spending. Whether you are earning above average salary, or just enough for your credentials, your spending habits have the biggest impact on your financial success.
Spending more money on mere wants, especially those that you can’t afford, is never a good idea. The problem with overspending is that you’re basically wasting money — money that you could have set aside for savings or investments.
2. I regret living from payday to payday
Another habit that gets in the way of controlling your money is living from payday to payday. A lot of people find it hard to make ends meet just because of poor budgeting, and essentially, they do not know how to save money.
You have to remember that your financial future depends on what you are doing right now. Start by creating a budget that will help you figure out how you can make the most out of your income, then track your spending to make yourself aware of where your money is going.
3. I regret living on borrowed money
Do you have too much plastic in your wallet? Do you get payday or salary loans all the time?
Credit cards and payday loans are the most common culprit in digging yourself down the debt grave. Do realize that any kind of debt, big or small, is hard to handle when money is too tight. Living a life that is dependent on borrowed money puts you in higher chances of spending more than what you actually earn.
4. I regret not building up an emergency fund
Building up an emergency fund is a common advice. The sad thing about this is that too many people don’t have it. And when the unexpected situation arrives, they resort to emptying their savings, cashing out their retirement funds, or worse, borrowing money that will leave them in great debt.
Financial emergencies may come in different forms like medical expenses, home repairs, auto repairs… the list goes on. Arm yourself by building up an emergency fund that will help you get through unexpected financial circumstances.
5. I regret not having financial goals
Having only a rough idea of where your money went every month or every year just shows that your personal finance is poorly managed. And this could lead to a dreadful financial situation in the future.
Setting and planning on how to reach your financial goals is essential to building wealth and ultimately achieving financial security. The key to financial success is to stay focused on doing all the possible actions and strategies that will help you achieve your financial goals.
6. I regret not having any form of investment
If you want to enjoy your retirement without worrying about how you will get through a day’s spending, then consider investing as soon as possible. Investing is one of the best ways of adding up cash to your retirement fund through dividends and/or interest.
Considering the fact that government pensions and social security funds may not be as consistent and reliable, plan your retirement like these financial support will not exist in the future.
7. I regret disregarding health and medical plans
Consider medical expenses in your retirement plan. Most people expect that their expenses will go down when they retire.
But the truth is, more often than not, seniors spend more after retirement due to higher medical expenses (aside from the fact that costs are always going up). Getting a long-term healthcare plan is a simple solution to this problem.
Your current choices and resolutions when it comes to spending money may stem from the best of the best intentions. However, without careful planning, you may find yourself trapped in a situation where there is nowhere else to go.
So as early as now, work your way through financial success and worry-free retirement by reading and learning personal saving tips and personal finance.
Retirement planning entails many important choices and decisions that you have to make. It may be overwhelming to consider everything that is pointed above all at once, but it pays to take one step at a time.
Author the Author:
Cristina Beltran is a writer, blogger and online marketing specialist at MoneyMax, the Philippines’ leading financial comparison website.