Wealth may be a long term goal of many, but its the small habits that make or break your ability to achieve it.
Wealth: it can mean something different to each person that you speak with but in the context of financial wealth there are make-or-break habits that can often be overlooked. Today we will cover five bad habits that are killing your ability to become wealthy.
1: Not saving a portion of your monthly income.
First, lets clarify that this is saving along with your company sponsored plan (not just within the plan alone). This becomes so important because if we don’t have money to the side from our retirement accounts it can take just one event to set us back into a very tight financial position. In addition, you create some versatile tax options for yourself by having different savings vehicles for your wealth.
2: Using a credit card when you don’t have cash
“Don’t buy anything you can’t buy twice in cash.” It seems like a simple concept but the unfortunate truth is that turning to credit is all too common. When you buy something with credit you are tacking on unnecessary interest payments that could go towards your savings.
3: Ignoring your employer’s savings plan
Where else can you get money just for participating? If you aren’t taking advantage of an employer’s savings plan you are leaving both tax advantages of the plan and the employer’s matching contributions at the door. Don’t give away free money (via employer matches).
4: Refusing to make extra payments on credit cards
Ever hear of the term “Compounding Interest”? Often its thought of in a wealth generation context but guess what? Compounding interest is a vile debt-generation vehicle as well, an the credit card companies know it. If you are only making minimum payments your credit card company is basking in your interest income.
5: Forgetting about an emergency savings account
Living paycheck to paycheck is both emotionally and financially taxing. If a concerted effort is not going into putting money aside there is a great risk to being set back. It may only take one health incident or a car breakdown to create serious setbacks. Even if it means taking a hard look at your budget or picking up a side-hustle to get some money aside do it now. You’ll thank us later.