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Monday, October 23, 2017

Are You Financially Sabotaging Yourself?

Posted by PattiM on

You have a decent job, decent income, you work hard but never seem to be able to feel financial security. What are you missing? You are likely suffering from one or more common undiagnosed financial problems of your own making. The good news is, since you made the problem, you can correct the problem.

Let’s have a brief look at the problems you may be suffering from:

Not Planning – Planning finances isn’t as much fun as planning vacations but your finances will be around a lot longer. We have a tendency to procrastinate and we’re no different when it comes to our finances. We let credit card balances accumulate instead of getting serious about getting them paid off, we put money into investments and then never get around to examining if we’re getting a decent return on our investment. Failing to plan is planning to fail.

Overspending — The average Canadian only saves about 5% of their income. Many Canadians have no idea where their money goes and don’t make an effort to track it. Being deliberate about determining the difference between needs and wants is vital to learning to reign in spending and start putting those hard earned dollars into savings.

Buying With Consumer Credit
— Buying on credit encourages you to buy more than you can really afford. Carrying a balance on your credit card from month to month reduces your future available income as you have the interest to pay from month to month.

Delaying Saving For Retirement – The later in life you wait to start saving for retirement, the harder it will be to reach your goal, assuming you actually set one. For the most part, you need about 10% of your income over your working lifetime for retirement. Winning the lottery is not a retirement plan.

Falling Prey to Financial Sales Pitches — Be very very wary of any investment offer which doesn’t allow you to either give it some thought or get a second opinion. If the person trying to sell you on the investment is pressuring you to commit, you need to back away.

Not Doing Your Homework – You need to treat your financial services purchases as seriously as you treat purchasing a car or a home. Explore your options, check reviews from independent third parties, get recommendations etc. This is especially important in selecting a Financial Adviser.

Making Decisions Based on Emotion — Fear, stress, worry can either drive us to change for the better or to make mistakes. Life changes means you need to examine your situation and your goals, to adjust as needed. Don’t ever make a decision on changes based on your fear of what might happen, make your decisions based on the available information and advise from others who are not struggling with that fear in the pit of your stomach.

Not Separating the Wheat From the Chaff — Not everyone who writes about finances and financial services are an expert. That includes me. You need to always keep in mind, you are your best adviser IF you make sure to educate yourself wisely.

Exposing Yourself to Catastrophic Risk —  You’ve bought insurances to cover emergencies and diligent worked a savings program to cover unexpected job losses. How often do you examine your insurance coverage to determine if they will cover you should you have to make a claim? Often your understanding of what the policy will cover and what it says are miles apart, don’t wait until you need it before you learn that.

Focusing Too Much on Money — Money shouldn’t be the centre of your world. It is important to look after your financial health but don’t let it consume you. You have to balance your financial work with your family life, your health and your social activities. Find the balance point, don’t let it control your existence.

With effort, education and patience you can stop sabotaging yourself and gain confidence in handling your finances.


disclaimer: The contents of this post is based on circumstances current at the time of the post and are intended for general knowledge. For more specific answers to your questions about your own circumstances use our contact form or post a comment below. NOTE: For a FREE, confidential analysis of your situation click here.

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