11 Ways You May Be Hurting Your Financial Future

by Andrea Norris-McKnight

DIY Landscaping for Less photo

If you’re neglecting any of these essential money tasks right now, you’re also hurting your financial future.

Things you do or don’t do now regarding your finances impact more than your current finances. If you’re neglecting any of the following financial tasks, you could be hurting your financial future. By being aware of these behaviors, you can take steps to avoid or rectify them to secure financial stability both now and later.

1. You’re living beyond your means.

You don’t have to live an extravagant lifestyle to live beyond your means. “Living beyond your means” is simply another way to say that you spend more than you can afford to maintain your lifestyle. And it can lead to debt and long-term financial instability.

Even if you don’t spend much on non-essentials, you could be paying more than necessary for the essentials. Do you fail to adjust your thermostat during the day when you aren’t home? Has it been a few years since you bothered shopping for cheaper auto insurance? Do you make an effort to keep grocery costs in check?

By living within your means now, you’ll eventually reach a point where your means more than cover your lifestyle.

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2. You don’t have a budget.

If you don’t have a budget, there is a good chance you aren’t in control of your finances and may not know how far beyond your means you are living. Or how much of your current overspending is harming your financial future.

Perhaps you can always pay your bills and put a little into monthly savings. But you’ll have difficulty breaking the paycheck-to-paycheck spending cycle and becoming financially secure without using a budget to highlight overspending or under-saving and then changing your habits.

3. You’re accumulating high-interest debt.

Credit card debt, payday loans and other high-interest debt can quickly spiral out of control and hamper your financial progress. Rather than remain at the mercy of high-interest debt, make a plan to get out from under it. It could save you several thousand in interest you can use for a more secure financial future.

Suppose you owe $7,500 on a credit card with a 20.99% APR, and you’re only bothering with the minimum $219 monthly payment. It will take you about 53 months to pay off that card (If you stop using it) and will cost you about $4,000 in interest — $4,000 that your future self will not have for other things.

Increase that monthly payment by $100 each month, and you’ll have the card paid off in 31 months and only pay about $2,200 in interest.

4. You’re not building savings.

If you don’t have an emergency fund or are ignoring retirement savings, you’re leaving your future self financially vulnerable.

Emergency Fund

Not setting aside an emergency fund can leave you vulnerable to unexpected expenses and financial setbacks — and may be why you’re carrying high-interest debt. You use your credit card as an emergency fund.

Building an emergency fund will take time and won’t help you right now, but that’s no reason not to build savings to protect your future finances.

Retirement Planning

Neglecting to save and invest for retirement can leave you unprepared for your later years, potentially leading to financial strain when you’re ready to stop drawing a paycheck.

5. You’re not investing.

If you regularly save money, you’re heading in the right financial direction, but you may not be earning as much on your savings as you can if you aren’t investing some of it.

Failing to invest wisely can result in missed opportunities for long-term growth and financial security. If you’re new to investing, you’ll find a wealth of advice online from reputable financial sites or seek the guidance of an investment advisor or other financial professional.

6. You’re skipping necessary insurance coverage.

Paying for insurance might feel like you’re paying for something you will rarely need or never need, but not having proper coverage if you do need it will likely cost far more than what you’ll pay for those premiums. Your future self could experience significant financial losses in the event of unforeseen, uninsured circumstances.

7. You don’t regularly monitor your credit.

Neglecting to review your credit report regularly and failing to maintain or improve your credit score can make it challenging to secure loans, mortgages or other lines of credit at a good interest rate in the future.

8. You don’t have any financial goals or a plan.

Goal-setting is about planning for the future so your tomorrow is slightly better and more stable than your today. Lacking clear financial goals and a plan to achieve them can lead to haphazard decision-making and long-term instability.

Start your goal-setting with one of the many money tasks on this list, and then work through any you have neglected.

9. You don’t stay abreast of common financial scams.

Scammers seem to be getting increasingly sophisticated, and falling prey to scams can lead to significant financial losses. Stay on top of the latest scams and learn best practices for protecting your personal information and bank accounts.

10. You don’t seek professional financial advice.

Failing to consult with financial professionals when necessary, such as financial planners or tax advisors, can result in missed opportunities or costly mistakes. You can DIY much of your finances, but you should seek professional advice for decisions that have the potential to impact your finances significantly.

11. You procrastinate.

If you aren’t focusing on any of the above tasks, it may be due to procrastination rather than neglect. You want to make that budget or check your credit report, but other things are taking up your time.

The sooner you attend to these essential money tasks, the more secure your future finances will be. Your future self will thank you.

Reviewed October 2023

About the Author

Andrea Norris-McKnight took over as the editor of The Dollar Stretcher and After 50 Finances after working under the site founder and previous editor for almost 15 years. She has also written for Money.com, GOBankingRates.com, HavenLife.com and The Sacramento Bee.

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