It happens to the best of us. You may have been spending carelessly, buying things you don’t really need. But hey, we’ve all been there. A new house, car, or even the newest iPhone that just came out. It’s all so tempting, but how can you recover from these financial mistakes? These regrets can haunt you later on down the road. Your future depends on what you plan to do about your decisions today. Bad choices will keep happening unless you decide to change and we can help you.
Financial Mistakes
Avoiding making the same mistakes over and over again could be a challenge. It is definitely not easy by yourself to just change your habits. Even if it’s just seemingly little things like overspending on your Starbucks run everyday or going to weekly movie nights at the local theater, if you are living above your means, it is going to bite you in the back in the future. No one wants that to happen, but these compulsive spending behaviors occur more often than you might think.
People usually don’t realize or like to admit that they are excessive spenders with no self-control. But in reality, the first step is acknowledging that this is a growing problem that needs to be solved. Every dollar you keep spending when you really shouldn’t can hurt your finances in the long term. You don’t want to spend the rest of your life in debt and paying out of your pocket all the time. It causes stress and leads to other problems down the road. If this sounds like you or you know of someone like this, it is not too late.
In this generation, with such easy access to money using credit cards, many people do not even feel like they are spending that much until they look at their bank statements. With just a swipe of the card, you literally are paying the price in which you may regret later. Those momentary instances are when quick decisions you make amount to huge consequences.
Dining out, mortgages, and car payments can really drain your bank account. Millennials love the freedom to eat and travel whenever and wherever they want but with that comes great responsibility. It’s convenient but paying for gas, groceries, Netflix, Spotify, and weekend getaways can add up quickly. That’s not including insurance, maintenance, and utilities which are things that you may need in case of emergencies, but do not think of on a daily basis.
It’s Not Too Late
Saving your money for a rainy day is a smart strategy that people of all ages should adopt. Overspending leads to surviving on paycheck to paycheck. To sum it up, this is not fun. Constant worrying and anxiety will have detrimental effects to your health. From a financial standpoint, you can save yourself from risk and trouble later on if you discipline yourself today. Keeping track of what you spend, no matter how little or big the expense is, can pay off in the long run.
Only spending on what you can afford is a good, sustainable mindset to have as sometimes when you are in the moment of the buying decision process, you can’t think straight. But setting a firm guideline for all your purchases will put you in a good financial position in the future. The quote “little things add up to a big difference” applies in this case as your everyday, seemingly trivial decisions can have a dramatic effect. You, of course, want the result to be a reward and not a consequence. For that “difference” to happen, you should plan ahead of time and identify your past financial shortcomings to learn from them for the future.
Being knowledgeable in what exactly that is you are doing with your money and prioritizing making a budget should be the way to go. The trade-off between sacrificing your precious time now, instead of going on your phone or watching Netflix, and actually sitting down to think of what your financial goals are short-term and long-term, can be worth it.
Starting with budgeting is part of a great financial plan. Know what exactly you are overspending on can help you cut back on these expenses. What you need and what you just want are very different situations. Also planning for scenarios such as if you lose your job or if you get into an accident which can lead to piles of medical bills will set you apart from others with no financial goals in mind. This can put you in a better place at retirement too. Investing in a separate fund such as an IRA can be a very smart decision that can pay back in the future. It puts your money in safe hands for long-term returns.
Pursuing Your Goals
To move on from your financial mistakes, you need to live and learn from the past. Don’t forget what it taught you in terms of being realistic with your expenditures and knowing your budget. Consistently saving your money can put you in a stable financial position for long-term investment. Avoiding too much of a debt can help you stay away from living paycheck to paycheck and alleviate a lot of stress.
Making sure to budget and avoid overspending can help ensure that you don’t create the habit to live above your means. Once a habit is part of your routine, it will be increasingly difficult to break it. Having only one source of income is also a risky way to live life. Making smart investments with your hard earned money can have real returns in the future. Don’t wait till later to start saving and budgeting because “later” can become “never” and then it can actually become too late.
Here at M3, we can help you with your financial goals through saving and budgeting using our low touch and automated investment processes available 24/7. We want you to get the best value in financial products while planning for the future. Don’t get caught off guard, but stay ahead of the curve by starting today.The best ways to stay motivated to not overspend are to have financial goals that are important to you and to plan for your dreams. Considerations to take into account are how long it will take and how much you can save each month to achieve your goals. Track your progress to stay up to date using our digital tool providing you with a place to start.