4 Money Moves You’ll Regret in 10 Years
Making smart financial decisions can set you up for success throughout your life. And even though you might have good intentions with most of your choices, some money moves might make you question your judgment.
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Keep reading as we explore some personal finance moves you might be tempted to make but regret in the next 10 years.
Starting a Budget Too Late
Most people don’t like the idea of budgeting at first. The idea of being limited to a fixed amount of money for certain expenses each month feels constricting, but as they continue with their budgeting journey, it becomes freeing. They find ways to adapt and make a budget work so they can spend on things they like and build wealth.
The real issue with budgeting is that many delay setting up a budget until it’s too late. They spend money without a clear understanding of where it’s going, causing overspending and credit card debt. This delay can lead to regret because instead of growing their wealth, they’re digging themselves out of debt.
“Living beyond your means might provide temporary satisfaction, but it often leads to a cycle of debt that can be challenging to break free from,” said Melissa Cid, consumer savings expert for MySavings.com. “Many people who consistently spend more than they earn find themselves relying on credit cards, loans, or even borrowing from retirement savings to maintain their lifestyle. This not only jeopardizes their financial stability in the short term but also significantly impacts their long-term financial health.”
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Not Saving for Retirement
When you’re in your 20s or 30s, retirement feels distant and saving isn’t necessary right now. That couldn’t be further from the truth. When planning for retirement, you can’t start soon enough. By taking advantage of compounding returns, you’ll be in a much better financial position if you start saving at 25 instead of waiting until 40.
You don’t need to save much money each month immediately; starting small is fine. Even $10 a week can lead to significant money after 40 years. Then, as you start earning more, you can gradually increase your contributions.
“Not investing in retirement early is a missed opportunity that becomes more apparent as the years go by,” Cid said. “The power of compound interest means that the earlier you start investing, the more time your money has to grow. By not prioritizing retirement savings in the early years of their career, individuals miss out on the potential for their investments to multiply over time.”
Not Having an Emergency Fund
Starting an emergency fund might be one of the most important things you can do for yourself. Unexpected expenses will happen at some point, and being prepared can help you avoid going into debt to pay for them.
Most financial experts will recommend having at least three to six months’ worth of expenses in your emergency fund. While it seems like a lot of money, you don’t need it all at once. You can grow your account slowly over time. The goal is that you have enough money in the account by the time you need it.
Not Investing in the Stock Market
For many people, investing in the stock market can be highly intimidating. However, it’s one of the best ways to grow wealth over time. Luckily, there are ways to invest that can help minimize the intimidation factor.
Robo-advisors are a great way to invest and have everything managed for you. Let the robo-advisor know how much you want to invest each month and how much risk you’re willing to take and it will do the rest. Alternatively, you could invest in an exchange-traded fund (ETF) that tracks the S&P 500 index. This is a simple way to put your money to work without worrying about the performance of individual stocks.
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