We live in a weird time, and our finances are seeing the impact of it. With the little plastic cards and green pieces of paper in your wallet draining away, and inflation on the rise, your money habits can be absolutely devastating to your overall preparedness, and your capabilities down the road. Here are 5 things you are doing that absolutely DEVASTATE your financial preparedness.
1. Abusing Credit Cards
Credit cards are the absolute bane of your financial existence if the you don’t manage them VERY, VERY carefully. Holding a balance on your credit cards is almost always going to result in you giving away your hard earned money, and very rarely for anything truly worth having. With variable rates up to 35% in some cases, you are can literally be giving away hundreds of dollars per month in precious dollar bills. The solution is simple, but hard. It’s time to cut back, buckle down, and pay those down. Never miss a payment, take out a second job if you have to, but get rid of those expensive payments. If you find yourself starting to charge up your balance again, get rid of those cards ASAP. Close the accounts, and take the temptation away.
2. NOT Having an Emergency Fund
Setting aside money is never the best feeling in the world. It’s difficult to take that buying power and isolate it away from that precious Amazon account you love so much. I would know, I’ve been window shopping for months. That being the case, when push comes to shove and your water heater or A\C breaks down, having the cash set aside to solve the problem is pretty dang convenient. Payment plans are always costly, and the minimum payments will drag it out to squeeze out as much money for as long as possible. It’s typically recommended to save up 3-6 months of living expenses, and I’ll also add that saving up to pay for the largest non-insurance covered emergency you can think of in addition to that is also good to have.
3. Missing out on Employer Matches
The great 401K. Whether you believe in investing for retirement, not picking up your employer match is the prime example of giving away free money. It’s a benefit for a reason, and it’s coming at exactly zero cost to you. These investments have a very strong history of going up in value over time, and the money is free as long as you are putting dollars in now. Always take the time to maximize your employer benefits as soon as possible and as young as possible. Think of it as a three percent raise you get for signing a few pieces of paper.
4. Wasting Money on Consumable Items
This goes hand in hand with #1, as credit cards tend to enable us to overspend on consumable goods like snacks, toys, cheap gadgets, and other luxury goods that ultimately distract us from our end goals. Things like going out to eat or spending money on decorations to replace our decorations (that we’ll be taking to Goodwill) or other general clutter items contribute rapidly to the overall decay of ones financial situation. Don’t get me wrong, I enjoy buying the occasional meal out to eat, but there does come a time when you have to draw a line.
5. Free (and cheap) Home Upgrades
Recently, I had my attic insulated for free, all thanks to my electric company. They payed a local business to come in and test my home for air leaks and other ways to improve the energy efficiency of my home as part of an incentive program they were offering at the time. These services tend to come and go, but are pretty regularly made available and I highly recommend you take advantage of them for some big time savings. It addition, simple solutions like changing up your bulbs and power outlets can save you those wonderful dollar bills down the line.
So there you have it. And honestly, while all of this is easily said, it’s not so easily done. I would know. I’ve been doing it. It’s hard work, but the investment pays off over time and is incredibly important for your long term future. The peace that come from good money management is something that will propel your preparedness journey forward in ways you don’t even realize.
Peace through Preparedness.
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