It has been said that the decisions made now, affect the future. This holds true in many facets of a person’s life. Some decisions result in great benefits in the long run. Some decisions seem good at the time, and hurt over time.
This applies to financial decisions also. There are financial decisions that can haunt you long term. Some decisions may seem unimportant at the time and for several months or years. However, sooner or later, those decisions will come back to bite you.
No Savings
Not opening a savings account can hurt you in many ways throughout life. Unforeseen things can happen. For example, kids may need braces, vehicles break down and people fall ill.
Another way not having a savings account can really haunt you is retirement. When the time comes to retire and there are no savings, panic and stress can be the result. Bills still need to be paid, food must be purchased and living expenses continue.
Poor investments
Investments are not limited to stocks. If you pay money to sell tents door-to-door, then that’s an investment. If you pay money to join a cosmetic company as an independent representative, that’s also an investment.
The problem with these types of companies is that they make money off of you and your sales. Many people who join these companies don’t break even, let alone make money. It’s fine to want to work from home and write your own ticket. It’s not likely to happen through investing in these kinds of companies.
Other bad investments include the infamous “get rich quick” schemes. These never seem to work out for anyone except the scammers. It really is staggering how many people invest in these scams. Some people have invested their life savings in these types of “businesses”. They don’t realize it’s a scam until it’s too late, and after their money and the scammers are long gone.
“Putting all your eggs in one basket”
Putting all your money toward one large endeavor may work out in the short term. However, if that endeavor happens to fall through at some point, then you are left holding the bag. Even if you can sell part or all of it, you still suffer a loss. This can devastate you financially for months or even years. Some people find it difficult to financially recover after something like this.
This is not to say you should spread your money too thinly either. That can end in disaster as well. Still, the problem with putting everything you have toward one major thing can result in losing much more than just a few bucks.
One field of expertise for employment
Going to college and earning a degree in your chosen field is admirable. It can afford you the opportunity to get a high paying job. You can become a respected expert in your field.
What happens if the demand for your expertise drops? Worse yet, what if the company you devote years to goes out of business? What happens to you if they downsize and you are laid off?
Nowadays, there are so many people out of work due to these very situations. They are having a hard time finding another job because they only had one field of knowledge and skill set. In these unstable economic times, being an expert in only one field can potentially ruin someone.
Not budgeting
Not creating and adhering to a budget can lead to financial crisis in the future. Everything may be great for years while there is a steady income. What happens when a major unexpected event occurs? Panic and stress often set in after a major event happens.
People who decide not to budget often find themselves in bad financial and emotional bind down the road. People don’t think about budgeting when everything is going well and the bills are paid with money left over. The folly in this thinking is that you aren’t prepared for unexpected expenses.
Make wise financial decisions, not only for today, but for the future too. You never know what can happen next week, let alone ten years from now. Try to get in the mindset of future planning. Live today, but plan for tomorrow.
Weigh pros and cons before making any major or even minor financial decisions. If something seems to good to be true, it probably is. By making smart financial decisions today, your future self will be thanking you.