munKNEE.com Your Key to Making Money
I’m a take-responsibility-for-your-actions kind of guy, which is why I don’t have a problem telling you that most of your financial problems are self-inflicted… If you’re constantly lamenting you never have enough money or can’t get ahead, well — you’re probably sabotaging your own financial progress in one of these 5 ways.
The comments above & below are edited ([ ]) and abridged (…) excerpts from the original article written by Mikey Rox (WiseBread.com)
1. Lifestyle inflation
Mo’ money, mo’ problems. It’s not just a song from Biggie, it’s also an accurate reflection on how increased income doesn’t necessarily improve your financial situation. If you’re not careful, often as your wallet grows, so does how much you spend.
Says Coupon Sherpa saving expert Kendal Perez:
“When you receive a raise, it’s challenging not to make upgrades to your belongings since you can afford to do so.
However, lifestyle inflation sabotages your financial goals in that you won’t actually be richer; instead, your toys and debts will be more expensive, and you’ll stay at the same level or be even worse off than you were before the increase.”…
2. Refusal to sacrifice
As much as you want it all, sometimes that’s just not possible — especially if the effort is making you broke. In that case, you need to step back, figure out what’s most important to you, and sacrifice what you can live without. For example, if you’re holding on to that fancy, expensive car despite barely making the payments, while other bills are also suffering, it’s time to re-evaluate. That vehicle may be fun to drive, but it’s probably not so awesome to live in.
3. Avoiding your financial fears
Managing your money can be intimidating. Unfortunately, brushing your money issues to the side won’t make them go away. In fact, it will only exacerbate the problem, which will return with a vengeance if you disregard them for too long.
Natasha Rachel Smith, personal finance expert at TopCashback, says:
“We make excuse after excuse to avoid our fears, including not tackling our finances because numbers can seem scary.
Pluck up the courage to make time for and respect money; it will then respect you back and you’ll be in control of it rather than it being in control of you.”
It’s not just managing your finances on a basic level, though. Your fear of money is probably preventing you from making smart investments that can improve your overall financial outlook.
Says Smith:
“Fear of investing, or fear of new-tech options like high-yield online bank accounts, reduces the potential for financial growth.
Knowledge is power, so educating yourself on those financial topics that scare you is the first and most important step toward overcoming that fear.”
4. Relying on future success
I’ve heard it plenty of times before, and I’ve even said it myself: “I don’t need to worry about my finances right now. I’m young; in a few years I’ll have a good job and I can start thinking about things then” – and then, BAM! Suddenly you’re in your mid-30s trying to buy a house, catching up on a 401(k), supporting a kid or two, and kicking yourself in your own behind.
Millennial finance expert Erin Lowry, author of Broke Millennial: Stop Scraping By and Get Your Financial Life Together, wants you to cut that out.
“People use youth combined with a delusional idea of future success as an excuse far too often.
You shouldn’t buck healthy financial habits, like saving and investing in a 401(k) today, just because you think you’ll be earning $200,000 by 35.
There are no guarantees about your future, but you can control today’s behaviors and set yourself up for a comfortable life.”
5. Letting inertia keep you loyal
Ask anybody why they stay with their banking institution, and they’ll likely tell you that it’s a hassle to change. Is that how you’d respond? That mentality can cost you.
Money expert Michelle Hutchinson explains.
“Financial providers devise a number of incentives to keep you loyal to their services, but sometimes it makes sense financially to make a switch.
Despite this, many Americans will stay with the same providers for years due to it being perceived as a hassle or little value to switch.
Set a calendar reminder every six to 12 months to review your current banking, credit card, insurance, and loan providers to ensure you’re getting the best deal.”