When it comes to managing our finances, many of us are not very smart. The smart ones please excuse. The feedback collected, by the author, from a cross section of folks suggests a commonality of stupidity in dealing with money. Their combined list of seven financial sins ranges from the emotional to the practical but offers a pathway to financial smarts. Check out if you have anything in common with them and wat you can learn to do better going forward. Team RetyrSmart
Are you doing anything stupid with your money? Find out here
- Having No Clue How Much You Spend
As a retired person you may be trying to manage your spending within your financial comfort levels. But if you don’t really know how much you are actually spending, then that doesn’t help much. There are lots of online tools to track spending. Once you know how much you spend, you can budget more effectively.
- Spending or Borrowing Just Because You Can
You may qualify for a certain amount on a new credit card or a mortgage, but that doesn’t mean it’s a good idea.
- Not Planning Ahead — Way Ahead
It’s always easier to think short term, but this could lead to a lot of missteps with your financial planning. You may, in fact, have to think beyond your life. That’s probably where estate planning comes in. Estate planning can maximize what you leave your heirs and should also include a health care proxy, a durable power of attorney, and details such as who gets what from your estate.
- Going Along With What Your Friends Do
Money is like dieting: One system does not work for everyone. Don’t use a budgeting app just because your friend uses it. Don’t buy a house just because your peers are. Don’t assume the strategy that worked for your uncle will help you, too. Your financial investments should meet your needs, not their own. And it’s a good idea to review the plan on an annual basis.
- Letting Love Rule Your Wallet
Don’t let the stars in your eyes blind you to the risks of co-signing loans or credit cards — the obligation may outlast the relationship. Worse, some relationships turn financially abusive when one partner uses money as power or leverage. If you’re in a healthy relationship, own your financial responsibility.
- Refusing to Ask for Help
Don’t be shy. If some financial matters are not very comprehensible to you, don’t hesitate to seek some professional help. No matter where you find help, make sure the advice is specific to you and understand how your financial adviser is being compensated. Be wary of commission-based advice.